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Analyse The Structure Of The Market Structure Of Oligopoly And The Difficulty In Predicting Output And Profits

Market structure of oligopoly

Oligopoly is a market structure where there are a few firms producing all or most of the market supply of a particular good or service and whose decisions about the industry's output can affect competitors. Examples of oligopolistic structures are supermarket, banking industry and pharmaceutical industry.

The characteristics of the oligopoly are:

• Small number of large firms dominate the industry
• High degree of interdependence: the behaviour of firms are affected by what they believe other rivalry firms might do
• High barriers to entry that restrict new firms to enter the industry e.g. control of technology
• Price stability within the markets
• Goods are highly differentiated or standardized
• Non –price competitive e.g. free deliveries and installation, extended warranties
• Restricted information.......

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Approximate Word Count: 1648
Approximate Pages: 7 (250 words per double-spaced page)

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