Oligopoly (Economics) 1) Main assumptions of Oligopoly 2) Price stability in Oligopoly.

1) Oligopoly is when a particular market is controlled by a debase group of firms. For eccentric supermarkets, there be three (there usually exist three companies) companies which dominate the market, Wong and Metro, Santa Isabel and Plaza Vea, and Tottus.

The main assumptions that economists mince when talking about a situation of Oligopoly atomic modus operandi 18 assorted; three or four plumping companies dominate the industry, however small companies do exist (smaller companies in the recent example would be for example Arakaki, a furbish up trader company); firms are interdependent, al will watch wha t the competitors do and act wherefore (when Wong created the grant card, it did not even passed a week when Santa Isabel created the Más Más card); the public of the kinked demand curl (which we will see what it is on top dog b); there are barriers to entry, this means it is difficult for other firms to go into the industry; non expense competition, as companies cannot contest by prices, so they have to compete with the service they offer (for example the Bonus and the Más Más cards); the oligopoly must be collusive (collusion), this means when the companies, which dominate, work together to control really high prices at the expense of the consumer (for example Umbro and Adidas, sell football shirts at very high prices, as a Manchester get together shirt be approximately $50), companies which work together to maintain high prices should be fined, as it is illegal. Advertising is in like manner all important(p) to maintain a high profit and market share, and also something very important, which is to bour! geon bulls eye loyalty (for example, once I began to buy Sony electro domestics, I begin to have a brand loyalty, as I never had a single hassle with them). 2) The causes of price constancy (when prices are stable, If you want to get a full essay, come in it on our website: BestEssayCheap.com

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