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Finance & Accounting
Pages 4 (1004 words)
Running Head: Economics Economics [Writer’s Name] [Institute’s Name] Economics 1) What market structure is illustrated in the article? The article talks about Oligopoly. It is the theory of an imperfect competition. In an oligopoly, there are a few competitors and at least two firms have control over the whole market.
‘Much of the competition between these oligopolistic firms is usually in terms of marketing of their particular brand’ (Sloman, pp. 197-198 2008), although the marketing techniques may differ considerably from one industry to another. There is a huge deal of interdependence between firms in an oligopoly. The abstract tells us that they have power in many ways in terms of regulating prices and agreements. The decisions made by the rivals will affect each firm. Firms, hence affecting their decisions recognize this interdependence (Sloman, pp. 197-198 2008). 2) Explain two reasons for your answer in question 1? It is an understanding that the type of the market structure is oligopolistic because of the fact that a few numbers of firms have a larger share of the market. In addition, when there are collusions as in the above case, so it shows that the type of market structure is oligopolistic. In addition, all the six companies mentioned do not always compete aggressively (Bianco, 2011). It has been an observation that the companies have merged/collusion, which is done only in cases of an oligopoly where there are a few number of firms and they have a considerable, share in the market. ...
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