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Essay specific features

 

Issue:

Miscellaneous

 

Written by:

Frank M

 

Date added:

June 7, 2014

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 679

 

Was viewed:

7577 times

 

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a large percentage of the market is taken up by the leading firms). Firms within an oligopoly produce branded products (advertising and marketing is an important feature of competition within such markets) and there are also barriers to entry. The barriers may take on a number of forms, depending upon the nature of the industry; this allows firms to make abnormal profits in the long run...
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This creates uncertainty in such markets - which we seek to model through the use of game theory. Examples of oligopoly are the sale of petrol, supermarkets, telecommunications, banks and building societies. Theories About Oligopoly Pricing There are four major theories about oligopoly pricing: • Oligopoly firms collaborate to charge the monopoly price and get monopoly profits • Oligopoly firms compete on price so that price and profits will be the same as a competitive industry • Oligopoly price and profits will be between the monopoly and competitive ends of the scale • Oligopoly prices and profits are "indeterminate" because of the difficulties in modelling interdependent price and output decisions • When one firm has a dominant position in the market the oligopoly may experience price leadership...
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