OLIGOPOLY - created from Mind Map

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DEFINITION

Price and Output Decisions

CHARACTERISTICS

Non-Price Competition

Firms that produce the identical or differentiated products with difficult market entry

Kinked Demand Curved

The Cartel

Price Leadership Models

Assumptions :

If an oligopolists increase their price of his products, his rivals will not increase their prices

If an oligopolists reduced their price, the rivals will follow

Agreements between oligopolists

The profits will be share among the oligopolists

Cooperations between oligopolists

Conditions

to eliminates uncertainty and competitive

Small Number Of Sellers

Similar Costs for All Sellers

Inelastic Of Demand

Products Differentiation Miinimal

High Barriers to entry

Dominant Price Leadership

Barometric Price Leader

Few sellers but large in size

Identical or Differentiated Products

Firms depend on each other (Mutual Interdependence)

Barriers To Entry

Identical : Oil

Differentiated : Tires, Airlines Service,

If one firm reduced its price, other firms will reduce the price too

Forces To emerge

Economies of Scales

Ownership of Patents

Copyrights to name a few

Control Over an essential resources

Financial Requirements

Manegerial

Technical

Marketing

Non-Price Competition VS Price Competition

Marketing

Advertising

Sales Promotions

Better Services

Products Developments

Opting For Price Cuts - Reduces the prices of its products it can attract customers and establish itself

Opting For Non-Price Competition

Reaction Of Competitors : Quick. There will be price war

Reaction Of Competitors: slow and less-direct

Product Variations

improvements in quality