Electricity is discovery which human beings lived without for thousands of years, but now electricity becomes a daily human need. This discovery has changed the daily life of humans, and without it most of the things that we use every day would not work, or would never be created. Therefore, each country has its own electricity source and sector compete in one market. The most distinctive characteristic of the energy sector in Palestine is the scarcity of locally available resources and inability to fully utilize the available ones, making it heavily dependent on imports from Israel. In addition, the continuity of the Israeli occupation and its control of the boarders, passageways and much of the area led to block a lot of plans and programs prepared by the National Authority Institutions operating in the energy sector of the advancement of the sector. Thus, its important and interesting to know what is the market structure best characterizes the Palestinian electricity sector in the west bank to predict the behavior of the firms in the industry and how the prices would change since it affects everyone.
It was hypothesized that the electricity sector market in the west bank is an oligopoly. An oligopoly is a market form in which an industry is dominated by a small number of firms. The proposition was based primarily in the fact that there are a very small number of electricity distribution firms in the west bank with high barriers to entry as there is a high cost of production. To prove this hypothesis, I must attempt to correlate the supermarkets with characteristics of an oligopoly. Those are: Number of firms: few.
Products are slightly differentiated (as in groceries).
Size of firms: relatively big.
High barrier of entrance.
Similar price range.
There are four different market structures, and they are illustrated and arranged on a spectrum below
In the following section, the characteristics...
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