Oligopoly

1) A Study of Cartel Stability: the JEC, Robert H. Porter, 1880-1886 This paper examines the model proposed by Green and Porter, which is a model of dynamic price competition under imperfect monitoring, i.e. firms encounter the problem of detecting and deterring deviation from the agreement. Firms can only observe the market price, but do not know the actual production level of another firm. Unexpected fall in prices may account for deviation from the colussive output or bad demand shock. So…

The neoclassical economic model gives an exceptionally fulfilling clarification of why parties are willing to join hands and enter into a contracts. Parties enter into contracts with their own free will without any coercion. Hence each party will enter into a contract only if its anticipated benefits are greater than the expected costs. For example assume that a house owner offers to pay a painter $5,000 to paint her home. The house owner must expect the value of the benefits she receives from…

In monopolistic competition there is large number of small firms; in which each firm has relatively small market share, and each firm is sensitive to the average market price of its product. In Monopolistic Competition there are lots of buyers and sellers and has perfect information (buyers and sellers are able to see prices at which others are buying/selling), no significant barriers to exit or entry- anyone can join or exit, differentiated products - The products are similar but not identical…

determined that our selling environment has changed, so we are outlining a new plan. We have become aware that our selling environment has become imperfectly competitive and now is an oligopoly. Since, we have an oligopoly environment we now have substantial market power and no longer need to sell…

oligopolists controls competition. The companies that operate in such a market structure usually enjoy being at the top because of the numerous entity barriers that may be existent in the mother countries. It can be concluded that Apple operates in the oligopoly market structure based on the operating systems that they use on their devices. In real sense, the Smartphone market operates in the oligopolistic market because there are few firms that account for more than half of the industry supply.…

“Man is an animal that makes bargains (or exchanges): no other animal does this - no dog exchanges bones with another”. (Smith, A. (n.d.) Whether man is an animal or better described as a creature, notwithstanding, it can easily be said, even taken as an axiom that humans are actors in the economy. Even Robinson Crusoe on his little island maybe described as an economic actor in so far as he is motivated to behave based on factors such as scarcity, choice and cost. It has been said that “man…

List the two assumptions that underlie the conclusion that free markets are efficient. Explain how these assumptions either do or do not apply to an industry of your choosing. Pg 150 The two assumptions that underlie the conclusion that free markets are efficient. The number one assumption is that the markets are imperfect competition with each other. This means that a company does not have enough market power to control the quantity or price of a good. The second assumption is that the outcome…

I think one concept that has intrigued me is how some businesses compete in an oligopoly market. Netflix for example, entered the video on demand market in 2007 allowing the subscribers to streamline content through a device like a video game consul (Rayburn, 2009). Because the market for streaming content for VOD is emerging due to the continued changing of technology it places Netflix in the oligopoly market among HBO, Amazon, and Hulu. That is Netflix, HBO, Amazon, and Hulu are all vying for…

The Title of the Research Paper is “Regulating Competition in Oligopoly: The Case of Telecommunications in Brazil by Mr. Mario Possas , Institute of Economics, Federal University of Rio de Janeiro, Brazil. Accourding to the Author , his research is about the transition of Natural Monopolies to Oligopolistic type of Market System. His study is focused on the Brazilian Telecommunications sector. It is consider as Public Utility and prices have been regulated by the government. He also stated in…

A monopoly is a particular kind of monetary business sector structure. An imposing business model exists when a particular individual or undertaking is the main supplier of a specific decent (Nikaido, 2015). Thus, monopolies are portrayed by an absence of rivalry inside of the business sector delivering a decent or administration. Figure 1 – Monopoly The graph shows a monopoly and the price (P) and change in price (P reg) as well as the output (Q) and output change (Q reg) Source - Nikaido,…