Between the definitions of perfect competition and pure monopoly lie oligopolies and monopolistic competition, oligopoly is where there are a few sellers with similar or identical products , which are large enough relative to the total market that they can influence the market price. It is a form for market structure quite common. In many countries, the automobile, steel, petrochemical, electrical and computer devices all belong to category of oligopoly market structure. In recent markets, there are two main companies control the most of supply in restaurant market., which are KCF and McDonald's. It giving priority to monopoly elements, at same time it having some competition elements. The Mc Donald’s Company is the biggest provider of fast food, within juice drinking and coffee. In 2ndFeb, Mc Donald’s Company decide to give a discount to costumer for a whole year in China and also decrease the price of total products, and 3 days later KCF, another company which also take a great proportion of product sale in this market , say that they will drop their foods price with 10 percentage,
There are three main features of oligopoly that involves this strategy. The first one is high industrial concentration. Mc Donald’s is operating in an oligopoly market. The fast food market is controlled by these two main companies which is Mc Donald’s and KFC. The products manufacture and sold by which take up a great proportion in aggregate production and sale. The second one is the product is either generally homogeneous or differentiate a lot. The Mc Donald’s is the former in the market. The products provided by these two companies. They are basically homogeneous without remarkable distinction. As a result, either Mc Donald’s or KFC focus on sell new kinds of food attracting costumer. The last one feature is high entrance and withdraw barrier. Mc Donald’s Company has enjoyed an absolute advantage in capital, technique, production and sale scale,...
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