--%>

Define Oligopoly and its characteristics

Explain the term Oligopoly? Also explain its Characteristics?

E

Expert

Verified

A market where the supply is controlled by a small group of companies called as Oligopoly . In this situation, the actions of one company will have a material effect on the entire market for a product.

Characteristics of an Oligopoly are:

i) Substantial barriers to entry

ii) Market dominated by a few large firms

iii) Different products

iv) Price rigidityAn example of this type of monopoly would be the corporations Visa and MasterCard. These are in the business of card securities and hold major market share. However, it could be noted that Visa holds more of a pure monopoly status; MasterCard does have a high level of control to create a competitive market situation.

   Related Questions in Microeconomics

  • Q : Relationship between MPC and MPS

    Determine relationship between MPC and MPS? Answer: MPC + MPS = 1

  • Q : Example of how marginal utility

    An illustration of how marginal utility diminishes takes place when: (1) Todd only requires 180 screws for his bike repair shop however purchases a box of 200 screws. (2) Amy Sue decides she would instead contain 150 hogs than 151 on her pig farm. (3)

  • Q : Consumption pattern matching demand

    A house-hold maximizes the satisfaction it derives from the given income by: (i) Buying lottery tickets to save more wealth. (ii) The consumption pattern which matches demand prices with the market prices. (iii) Consuming goods and hence every good is enjoyed uniforml

  • Q : Relative Prices of household

    When a household consumes just x and y, a higher price of y and the stable price of x will make: (i) All goods cheaper relative to the x. (ii) x cheaper relative to the y. (iii) Real family income grow. (iv) Substitution against x the more desirable.

    Q : Market demand of purely competitive

    How purely competitive industries respond to raises in market demand depends upon: (w) the time period considered. (x) immediate quantity adjustments and longer run price adjustments. (y) each firm’s average total costs. (z) the slope of the mar

  • Q : Concentration ratio Explain the concept

    Explain the concept of a concentration ratio.  Is the concentration ratio in a monopolistically competitive industry likely to be higher than for a perfectly competitive industry

  • Q : Minimum Wage Laws and Monopsony Power

    The Minimum wage laws potentially raise both employment and wages if firms: (i) Have monopsony power in the labor market and don’t wage discriminate. (ii) Practice outsourcing across the international borders as labor costs abroad are lower. (iii) Are pure compe

  • Q : Define deficit budget Deficit budget :

    Deficit budget: When expenditure of the government is greater than its receipts, it is termed as deficit budget.

  • Q : Price elasticity of demand coefficient

    In this demonstrated figure, there the price elasticity of demand coefficient is: (1) one at the midpoint. (2) greater than one in range a. (3) less than one in range b. (4) falling along with movements down along the demand curve. (5) All of the abov

  • Q : Higher interest rate in funds A higher

    A higher interest rate is probably to be a consequence of: (1) lower expected profitability to investors. (2) new tax breaks onto interest income. (3) weakening preferences for current income over future income. (4) increased preferences for recent co