A Firm In An Oligopolistic Market ______. (2024)

FAQs

A Firm In An Oligopolistic Market ______.? ›

Firms in an oligopoly set prices, whether collectively—in a cartel—or under the leadership of one firm, rather than taking prices from the market. Profit margins are thus higher than they would be in a more competitive market.

An oligopoly refers to a market structure that consists of a small number of firms, who together have substantial influence over a certain industry or market. While the group holds a great deal of market power, no one company within the group has enough sway to undermine the others or steal market share.

oligopoly. A market structure in which a few large firms dominate a market; barriers to entry, cooperation, collusion and cartels.

Oligopoly markets are markets dominated by a small number of suppliers. They can be found in all countries and across a broad range of sectors. Some oligopoly markets are competitive, while others are significantly less so, or can at least appear that way.

In an oligopoly, any decision from one firm results in influencing the other firms. They do not make market prices. Instead, they follow a decision from a single firm, or they set their prices collectively. For instance, Pepsi and co*ke Company's decision affects one another.

Short Answer

In an oligopoly, firm behavior lies between that of a monopoly and competitors, depending on the level of competition and cooperation in the market. If firms engage in collusion, they act more like a monopoly by setting prices and limiting output.

Oligopolies engage in the practice of price-fixing. Instead of relying on the market price (dictated by supply and demand), firms set prices collectively and maximise their profits. Another strategy is to follow a recognised price leader; if the leader increases the price, the others will follow suit.

What is Oligopoly? Answer: An oligopoly is an industry which is dominated by a few firms. In this market, there are a few firms which sell hom*ogeneous or differentiated products. Also, as there are few sellers in the market, every seller influences the behavior of the other firms and other firms influence it.

What best describes oligopoly? Involves only a few sellers of a standardized or differentiated product, so each firm is affected by the decisions of its rivals.

An oligopolistic market is a market dominated by a few large and interdependent firms. There are many examples of oligopolies in the real world. Examples include airlines, automobile manufacturers, steel producers, and petrochemical and pharmaceutical companies.

What are oligopoly market examples? ›

Dominance by a few firms: While the industry may have several firms that operate with the industry, in an oligopoly market only a few large firms control and dominate the market. A prime example of this is the oil industry.

Detailed Solution. The correct answer is option 3, i.e when a small number of firms collude to fix prices. Oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence.

By acting together, oligopolistic firms can hold down industry output, charge a higher price, and divide up the profit among themselves. When firms act together in this way to reduce output and keep prices high, it is called collusion.

Answer: In an oligopolistic market, the kinked demand curve hypothesis states that the firm faces a demand curve with a kink at the prevailing price level. The curve is more elastic above the kink and less elastic below it.

The advantages of an oligopoly include increased efficiency and innovation, while the disadvantages include limited competition and potential for collusion. The paper proposes a quantitative framework to analyze the advantages and disadvantages of oligopolies in concentrated industries.

we defined a firm as an institu- tion that buys or hires factors of production and. organizes these resources to produce and sell goods. and services.

A firm is a business organisation such as a corporation that produces and sells goods and services with the aim of generating revenue and making a profit.

A firm is a business organization that seeks to make a profit through the sale of goods and services. The term firm is synonymous with business or company. Firms can operate under several different structures, including sole proprietorships and corporations.

Firm market. In the context of general equities, prices at which a security can actually be bought or sold in decent sizes, as compared to an inside market with very little depth.