The extent of oligopoly
Oligopoly is a market structure dominated by a small numberOf large firms, selling either identical or differentiated products, and there are significant barriers to entry into the industry. This is one of four basic market structures. The other three are perfect competition, monopoly, and monopolistic competition. Oligopoly being a general market structure category, dominates the modern economic landscape. About half of the output produced in the world's economy can be traced to oligopolistic industries. Oligopolistic industries are as diverse as they are widespread. Oligopoly ranges from breakfast cereal to cars, from computers to aircrafts, from television broadcasting to pharmaceuticals, from petroleum to detergent. Because each firm in an oligopolistic industry is relatively large, each has a substantial degree of market control. It's not total control like in a situation of monopoly, but it's significantly greater than that of a monopolistically competitive firm. While monopolistic competition and oligopoly have distinct identifiable characteristics, they really form a continuum on the spectrum of market structures. Any boundary separating oligopoly from monopolistic competition is fuzzy at beast.
In both perfect competition and monopolistic competition the actions of one firm have no affect on other firms. Oligopoly is a situation in which few firms dominate the industry. And to my belief it being the most integral. But there is a fundamental difference. automobile firms today are the same firms that were the three largest in the 1920s. The largest or lowest-cost or most aggressive firm will often emerge as the price leader. Oligopolies that follow a price leader do not engage in price competition, but they still contest for market share with a variety of forms of non-price competition. One is the tendency for competing oligopolistic firms to turn into cooperating oligopolistic firms. Oligopoly exists when there are a small number of firms selling in a single market. Oligopolistic interdependence creates a number of interesting economic issues. Them being, the firms might get together and form a cartel, coordinating their behavior as if they were a single monopoly. Oligopolies should have at least three different outcomes. Very few of us could raise the $8 billion or so that it takes to start an automobile firm. The number of firms may be fixed, or it may be free to vary. Ford, for example, owns Jaguar, half of Aston Martin, 25% of Mazda, and 10% of Kia.
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