Advantage And Disadvantage Of Oligopoly

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3)Oligopoly: The definition of the oligopoly is that it is a market which is controlled by a small amount of sellers who are attend to be aware of themselves and other seller in this market. They are free to make their own decisions together.
There are many characteristics of the oligopoly such as following:
1) There is a small number of sellers who control all the sales in this industry.
2) There are barriers to enter this market which let the sellers know how to determine the capital to compete in this industry.
3) There is a strong interdependence between the sellers. The firms are large relative to the market that they are working in. if one oligopoly firm change the price, all the other firm will be affected. For example, if any firm reduce
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4) The best advertising and quality of the services or goods will attract the consumer to this firm instead of going to another one especially if each firm try to deal with the latest and new technologies.

The disadvantages of oligopoly:
1) It is impossible for the small companies to enter this market because the huge firms completely control the whole market.
2) There is really a limited choice for the consumer to choose between the firms that are involves in this market.
3) The completive prices are far away from this market because all the sellers agree to have fix prices which is bad for the consumers.
4) Since there is no competition in this market, the firms lose the feeling of the need of creative or innovate ideas.
Examples of oligopoly industries and sales: There are many examples of these small group of firms which has the same industry such as automobile industry, steel industry, airline industry, soft drink industry and photographic equipment
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The examples of the monopolistic competition: The products of these companies are a little bit different such as the restaurant business, hotels, consumer services such as hairdressing and so on.
5)Contestable market : The definition of the contestable market is that there is few or no barriers to enter or exit the market whenever you want where low costs must low sunk and there is no recoverable costs for the advertising. The sole of competition is so important in this market to keep prices low and prevent abuse of monopoly activities.
The characteristic of contestable market:
1) There are no barriers to enter or leave the market. The firm can leave the market without costing them heavily.
2) There is no fixing prices so the firms can compete with each other.
3) Firms can maximize the profit in the short run.
4) The products are identical and branded.
5) The perfect knowledge is available in this market.

Examples of contestable market: There are many markets that try to enter the contestable market like the home banking and financial services, low cost domestic airline and electricity and gas

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