Oligoplistic Markets in Terms of Structure and Market Conduct

Only available on StudyMode
  • Download(s) : 665
  • Published : September 22, 2012
Open Document
Text Preview
Oligopolistic markets, such as supermarkets or car manufacturing, can be defined in terms of market structure or in terms of market conduct.

An oligopolistic market is one that has several dominant firms with the power to influence the market they are in; an example of this could be the supermarket industry which is dominated by several firms such as Tesco, Sainsbury’s, and Waitrose etc... Furthermore an oligopolistic market can be defined in terms of its structure and its conduct, which involve various different aspects of economics.

Primarily an oligopolistic market can be defined in terms of its structure this means several things such as the number of firms within a specific market this also links very well with a second aspect of structure which is the market share this suggest how much of the market the firm has control of this is ultimately what shows strength of one firm in comparison to another however when showing the market share within a oligopoly it is shown in form of a concentration ratio such a 5:80 this suggests within the oligopoly there a 5 firms with a total 80% market share. The final aspect of structure when analysing an oligopolistic market is the barriers to entry, these are obstacles that prevent new competitors from easily entering an industry or area of business firms in an oligopoly are able to use these barriers to entry because they are already established and therefore can afford to reduce their prices for a short period of time to outcompete new competitors an example of this is wuul audio a company who attempted to enter the audio electronics industry but was unable to compete due to the extremely low prices and already established brand of senheiser and audio-teknica.

|  |Yes B |No B | |Yes A |Both Fined |Firm B Fined | |No A |Firm A Fined |Continued benefit from | | |...
tracking img