Discuss whether this model of market structure (oligopoly) is the most appropriate to explain the behavior of firms in Singapore. 
Firms’ behaviours can largely be explained by the market structures they exist in as the number of players in the market and the kind of goods would determine the behaviours of the firms. In Singapore, the firms that dominate the economy are largely service industries as well as global firms that are exporting products overseas. Otherwise, the small size of Singapore markets allows just a few firms to dominate them and satisfy the demand of the entire market. These firms are large players in their markets, interdependent on their rivals’ …show more content…
In other markets such as restaurants, cleaning services companies, domestic retail banking, supermarkets and telecommunications, non-price competitions are easy to spot from the differentiated services they offer; often the fact that a new service or promotion becomes widespread after it is first started by a dominant player in the market shows that the firms are interdependent. Because of the small market size, most of these markets are dominated by just a few players. In banking, we only have OCBC, DBS and UOB while the telecommunications industry also features 2 giants, Singtel, Starhub and M1.
Of course, there are exceptions to the market structure of oligopoly in Singapore. Many small firms operating in niche areas of small neighbourhoods actually behave in ways modeled by Monopolistic competition market structure. In markets for hawker fare in hawker centers, for basic healthcare service from General Practitioners and neighbourhood convenience stores, firms that are small and provides slightly differentiated goods and services dominates. Each of them has limited pricing power as a result of the fact that there are many of them in the same market. The