Nature of oligopolistic industries
Posted on : 11 Jan 2020Views: 1114
- Oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence.
- A monopoly is one firm, duopoly is two firms and oligopoly is two or more firms. There is no precise upper limit to the number of firms in an oligopoly, but the number must be low enough that the actions of one firm significantly influence the others.
- The economic and legal concern is that an oligopoly can block new entrants, slow innovation, and increase prices, all of which harm consumers.
- Firms in an oligopoly set prices, whether collectively – in a cartel – or under the leadership of one firm, rather than taking prices from the market.
- Cooperation happens during Cartel Behaviour.
- There are entry barriers; else there would be too many firms.
Article Related Questions
Which of these are not the features regarding industries that are oligopolistic in nature?
1.Firms in these industries may try to cooperate with each other.
2.The fact that there is more than one firm in an oligopoly means that there are no barriers to entry.
3.An oligopoly with two firms is called a duopoly.
4.Firms in these industries are interdependent.
Right Ans : The fact that there is more than one firm in an oligopoly means that there are no barriers to entry.