Oligopoly (Economics) 1) Main assumptions of Oligopoly 2) Price stability in Oligopoly.

1) Oligopoly is when a particular market is controlled by a adulterate group of firms. For eccentric supermarkets, there be three (there ordinarily exist three companies) companies which dominate the market, Wong and Metro, Santa Isabel and Plaza Vea, and Tottus.

The main assumptions that economists show when talking about a situation of Oligopoly atomic event 18 assorted; three or four macro companies dominate the industry, however small companies do exist (smaller companies in the recent example would be for example Arakaki, a repair trader company); firms are interdependent, al will watch what the competitors d o and act wherefore (when Wong created the aid card, it did not even passed a week when Santa Isabel created the Más Más card); the universe of discourse of the kinked demand curl (which we will see what it is on apparent motion b); there are barriers to entry, this means it is difficult for other firms to throw in the industry; non expense competition, as companies cannot contest by prices, thereof they have to compete with the service they offer (for example the Bonus and the Más Más cards); the oligopoly must be collusive (collusion), this means when the companies, which dominate, work together to nurture genuinely high prices at the expense of the consumer (for example Umbro and Adidas, sell football game shirts at very high prices, as a Manchester joined shirt be approximately $50), companies which work together to maintain high prices should be fined, as it is illegal. Advertising is alike inseparable to maintain a high profit and market share, and also so mething very important, which is to bourgeo! n note loyalty (for example, once I began to buy Sony electro domestics, I begin to have a brand loyalty, as I never had a single worry with them). 2) The causes of price constancy (when prices are stable, If you want to get a full essay, come in it on our website: OrderCustomPaper.com

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