Wal-Mart In The Oligopolistic Market
Wal-Mart definitely is not in a monopolistic market as there are other firms that are competing for market share and profits. A monopolistic firms generally reaps both short term and long term profits from the market by charging high prices for the products that it offers. Wal-Mart does exactly the opposite where it ensures that it’s prices are the lowest in the market. This indicates an oligopolistic behavior of firms like Wal-Mart whose focus is to drive other competing firms out of the market by keeping the competition tight and profits negligible. For some of the firms this results in costs overshooting the profit forcing them to exit the market. So clearly, Wal-Mart portrays an oligopolistic firm behavior. An oligopolistic market has the following characteristics –
1. Fewer Sellers: A few firms are so large relative to the total market that they can affect the market price. This results in Mutual Interdependence where an action by one firm may cause a reaction on the......
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