Oligopoly essay plan

When these economies of scale are very strong, they lead to monopoly, but when they are not that strong they lead to competition among a small number of firms. Since an oligopoly con­tains a small number of firms, any change in the firms’ price or output influences the sales and profits of competitors.

In oligopoly, there may be product differentiation as in monopolistic competition (called differ­entiated oligopoly) or a homogeneous product may be traded by all the few dominant firms (as in pure oligopoly). 3. Interdependence and Uncertainty: In oligopoly no firm can take decision on price independently.

Oligopoly refers to a market situation in which the number of sellers is few, but greater than one. A special case of oligopoly is monopoly in which there are only two sellers. Essay # 2. Characteristics of Oligopoly: The notable characteristics of oligopoly are: 1. Price-Searching Behaviour:

The same analysis (solution) can be extended to cover any oligopolistic market. The earliest model of duopoly behaviour is the Cournot model, with which we may start our review of different oligopoly models. We end with the game theoretic treatment of oligopoly which shows decision-making under conflict.