Oligopoly Market Case Study

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Mid-Term Examination – Economics
The Rising Numbers of Alfamart and Indomaret in Indonesia’s Retail Industry and the Impacts on Traditional Retail Shops
There are several well-known types of market in economic sector, and one of them is Oligopoly Market. Oligopoly Market has a definition as a market structure in which a few large firms are dominating ("Oligopoly," Economics Online, 2016). Oligopoly markets may have a considerable power to fix prices and output – the power is concentrated in the hands of the few firms who can dominate the market to gain excessive profits (Economics Online, 2016). The domination by a small number of large firms, selling identical products, and has significant barriers to entry are the most important characteristics of Oligopoly markets (AmosWEB, 2016).
Even though Oligopoly markets may have power to gain excessive profits and dominating the markets, it may also bring negative results including the inequality of welfare distribution. For instance, in Indonesia nowadays, the numbers of Alfamart and Indomaret in Indonesia’s retail industry keeps rapidly increasing and brings significant impacts such as the decreasing numbers of consumers in the traditional retail shops.
It can be said that retail trading nowadays is one of the most strategical trading in Indonesia because it is able to absorb much employments after the agriculture sector; and basically retail trading can be …show more content…
(2016). AmosWEB is Economics: Encyclonomic WEBpedia. Retrieved October 21, 2016, from http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=oligopoly,+characteristics
Economics Online. (2016, April 26). Oligopoly [Video file]. Retrieved from https://www.youtube.com/watch?v=TdGNBdWyY94
Global Business Guide Indonesia. (2016). Indonesia’s Retail Sector; E-Commerce, the Next Growth Driver. Retrieved October 21, 2016, from

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