Oligopoly Market Structure

The Best Market Structure to Trade a Business With
A market structure can be defined as the nature of competition in the market for goods and services. In a market structure, the nature of goods and services is determined by competition. There are four types of market structure, which include perfect competition, oligopoly, monopoly, and monopolistic competition. A proper use of product promotion methods, following a well business ideas, as well as good use of business strategy leads to a good performance of a business organization. A good business relationship on both external and internal factors will contribute a lot in achieving the goal of the organization. The best market structure for an individual business to operate on is the perfect …show more content…
The entry in an oligopoly market structure is limitation. There is also a price war. Two major cause of oligopoly are barrios of entry and merging. Barrio of entry occurs when the new firms cannot enter into the market because the original firms control the resources for production of the goods and services. Merging occurs when big firms dissolve and combine to form one large firm hence eliminating competition (Kamien and Schwartz 54). The difference between oligopoly and perfect competition is that. In perfect competition, many buyers and sellers cannot influence the price of goods and services. In oligopoly, few sellers sell identical or differentiated products. These few firms have the ability to influence the price of goods and services through collusions and cartels. A cartel and collusion in an oligopoly market structure occurs when various firm come together and forms legal agreements on terms, condition and prices of their products. The cartels formed set the price, quality, and terms of selling the products of small firms (oligopoly). The antitrust laws prohibit the cartels (Stieglitz, and Mathewson