73266
Description
Mind Map by Javed Hussain, updated more than 1 year ago
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Created by Javed Hussain
almost 11 years ago
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Oligopoly
- market is dominated by a few lrge frms
- features
- interdependence
- e.g i 1 firm invests in TV ads
others R likely 2 loose sales
- e.g i 1 firm invests in TV ads
others R likely 2 loose sales
- barriers 2 entry
- helps firms 2 D average costs and I prfits
- new entants R attracted by profits and dominance is reduced
- new entants R attracted by profits and dominance is reduced
- helps firms 2 D average costs and I prfits
- price rigidity
- price stays same 4 long time so there wont be price war and a D in sales
- if 1 changes price others must follow
- price stays same 4 long time so there wont be price war and a D in sales
- non price competition
- e.g nectar points
- helps 2 I brand awareness and I sales
- e.g nectar points
- economies of scale
- lrge frms can do this but small cant so moves them away
- lrge frms can do this but small cant so moves them away
- collusion
- whre big frms set up agreemnts 2 restrict competiton
- price fixing
- when all firms agree 2 do this
- when all firms agree 2 do this
- restirct output
- illeagal in many countries
- whre big frms set up agreemnts 2 restrict competiton
- interdependence
- advantages
- economies of scale
- decrease in costs can be passed 2 consumr
- decrease in costs can be passed 2 consumr
- price stability
- frms want 2 avoid price
war(cos they might make
losses) and i 1 does others
have 2 keep profits
- consmrs have
cheap prices as a
result
- survivors may
also I costs
- consmrs have
cheap prices as a
result
- more certinty
- frms want 2 avoid price
war(cos they might make
losses) and i 1 does others
have 2 keep profits
- choice
- more choice + competition
- competition
- new products/brands
- new products/brands
- also 2 niche mrkt
- more choice + competition
- I barriers 2 entry
- economies of scale
- disadvantages
- big threat of a collusion
- cartel might happen
- where a group
of firms/countries
agree on output
levels and price
in mrkt
- where a group
of firms/countries
agree on output
levels and price
in mrkt
- frms may pay too much attention on competition they will I price
- e.g cadbury schweps spent 700 million on advrtisin
which increase costs 4 consur
- e.g cadbury schweps spent 700 million on advrtisin
which increase costs 4 consur
- big threat of a collusion
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