In lieu of an abstract, here is a brief excerpt of the content: Ritter bio the institutional structure of the cuban economy has undergone immense changes over the decades since the accession of the government of Fidel Castro in ByCastro's government had expropriated virtually all private sector enterprises, and legal employment in the sector fell to about 30, With the —93 economic meltdown sparked by the termination of Soviet subsidization, a more liberalized policy environment toward microenterprise permitted it to expand for a while.
Needless to say, an oligopoly is far from a perfect market and with it comes a number of interesting characteristics, most of them whittled to fine points by the friction of intense competition on one side and inter-reliance on the other. Still, these are problems every business would love to have.
We take a closer look at what makes an oligopoly tick below, but in the meantime check out this Mobile Monopoly course on how to take advantage of the mobile market.
A small number of big players. The firms need to be large so that they can truly protect the market; no small newcomers allowed. Identical or differentiated products. These are not synonymous. A differentiated product would be very similar products or services that offer the consumer variation: Audi, or Apple vs.
Learn how economic variables impact industries with this great course on Micro and Macro Economics. Or, barriers to entry. In other words, the companies that are a part of an oligopoly have certain rights or ownerships that make it all but impossible for another company to get their foot in the door.
They companies are so big, powerful and protected by the law, that they cannot be dethroned.
For example, these companies may all have exclusive copyrights Appleor access to resources Exxonor the market may have been developing for so long that unless you got in at the beginning, it would simply be too expensive to start now BMW.
Do Not Pass Go Obviously an oligopoly is not a monopoly or it would be called such, but they can be extremely similar. This is especially true when the products are not identical but are differentiated.
It might seem like it should be the other way around, but when the products are variations of each other, each firm has a particularly large share of the market their own loyal customers; for example, people who are partial to BMWs. In this way they can control price and production almost to the extent of a true monopoly.
This is because the market is still competitive and even minuscule changes in product or price can adversely affect the other companies; then the other companies will try to lower their prices by a more substantial margin, or develop improved technology, or whatever.
So you can see how it would be difficult to make decisions without first considering how it will affect the other companies and, more importantly, the extent to which they will go to regain a competitive edge.
Advertising is something that the biggest companies will spend hundreds of millions of dollars on annually. The reasons for this are ultimately simple. Technically, a true monopoly would not need to bother with advertising or selling costs. But in an oligopoly both are absolute necessities.
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If you get into a price reducing war, all the companies will quickly hit the bottom of the price barrel. Then there will be no room for flexibility and the profit margins will be unfavorable, to say the least. This is a result of dependence, as well. While completely illegal, it would be unwise for one of the companies to make a price cut without consulting with the others.
Nobody wants to get sucked into a bidding war for the lowest price. Demand Finally, even though all the companies have a dominating position in the market, they are all nervous to a degree and obsessed with forecasting changes to the market; pricing, demand, etc.
It is very difficult to anticipate what other companies will do when changes inevitably happen. One of the things that becomes truly uncertain is the demand curve. How does the demand curve change when quantity changes? How does it change when price changes?Media ownershipin in film industry 1.
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The term oligopoly is derived from two Greek words, Oleg’s and 'Pollen'. Oleg’s means a few and Pollen means to sell thus. Oligopoly is said to prevail when there are few firms or sellers in the market producing and selling a product.
Oligopoly is often referred to as “competition among the.