Characteristics of oligopoly, Managerial Economics

Assignment Help:

Oligopoly can be characterized as follows:

  • Small Number of Sellers: There are more than one sellers of a product though; the number isn't so huge in order to produce perfect competition of monopolistic competition.
  • Interdependence of Sellers: All the sellers are dependent on one another. They aren't free to establish their own marketing and price policies. Activities of one seller have an effect on others.
  • Homogenous product: Product of all the sellers is identical or a close substitute to one another.
  • Uniformity of Price: All the sellers adopt a uniform price policy because of the uniformity of their product.
  • Price Rigidity: As the activities of all sellers are inter-reliant, sellers prefer not to change the price of their product too frequently. For that reason market price tends to be steady.
  • Entry and Exit of Firms: The entry and exit of organisations is relatively difficult due to non-availability of raw materials, labour, etc.
  • Inconsistency in Firms: All the organisations operating in a market aren't precisely similar to one another. One organisation could be tiny and another organisation could behuge.
  • Uncertainty of Demand Curve: Demand curve is extremely erratic. An organisation can't predict its demand curve without difficulty since it's extremely difficult to predict whether or not competitors will change their policies of organisations. It is furthermore extremely difficult to predict the level of such changes. For this reason, demand curve of an oligopoly organisation is constantly erratic.

 


Related Discussions:- Characteristics of oligopoly

Limitation of bank rate, Limitation The degree or success with which t...

Limitation The degree or success with which the central bank can use its bank rate policy to control the total credit in the economy depends upon the interest elasticity of in

Keynesian view on unemployment, KEYNESIAN VIEW ON UNEMPLOYMENT   Keynes...

KEYNESIAN VIEW ON UNEMPLOYMENT   Keynes  in his General Theory presented  a view  that  fluctuations in  aggregate demand (AD) influences the equilibrium level of output. Thus

Relationship TR, Explain in brief the relationship between TR,AR and MR und...

Explain in brief the relationship between TR,AR and MR under perfect market condition.

Bertrand equilibrium benefits, The computer graphics chip industry is one w...

The computer graphics chip industry is one with a little number of competitors that earn normal economic profit. Two chip manufacturers, NVIDIA and ATI both face the prospect of lo

State the basis of business policies, State the Basis of business policies ...

State the Basis of business policies Managerial economics is the founding principle of business policies. Business policies are prepared based on studies and findings of manage

Direct taxes, DIRECT TAXES A direct tax is one where the impact and ...

DIRECT TAXES A direct tax is one where the impact and incidence of the Tax is on the same person e.g. Income Tax, death or estate duty, corporation taxes and capital gains

Keynesian unemployment, Keynesian unemployment According to Keynesian ...

Keynesian unemployment According to Keynesian theory of income and employment, unemployment occurs due to lack of effective demand. If effective demand is less, production of

Indirect taxes, INDIRECT TAXES These are imposed on an individual most...

INDIRECT TAXES These are imposed on an individual mostly producers or traders but they can be passed on to be borne by others usually the final consumers.  They can also be de

Knight theory of the profit, Frank H. Knight treated profit as a residual r...

Frank H. Knight treated profit as a residual return to uncertainly profit. Obviously knight made a distinction between risk and uncertainly he divided risk into calculable and non-

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd