StudentShare solutions
Got a tricky question? Receive an answer from students like you! Try us!

Essay example - Economic for Business: Monopoly and Oligopoly

Only on StudentShare
High school
Pages 6 (1506 words)
This study will explore the issues in economics and will focus on the article of Sloman and Sutcliffe entitled Economic for Business. The article explores two main issues in economy particularly in political economy and these are monopoly and oligopoly. According to the study Monopoly is a market situation characterized by: 1…

Extract of sample

the existence of blocked entry resulting to lack of competitors because of market barriers (Sloman and Sutcliffe, 2001).
Relative to monopoly, an oligopoly is a market situation that exists when: 1. there are a limited number of sellers; 2. the relationship between the limited sellers are interactive because the decision of one affects the others; and 3. the sellers may control price and market entry through collusion or they may engage in price wars (Sloman and Sutcliffe, 2001)). UK supermarket industry where Tesco, Sainsbury, Morrisons and Asda comprise a firm-concentration ratio of 70 percent and the UK brewery industries with a firm-concentration ratio of 85 percent are examples of Oligopoly.
Compared to monopoly and oligopoly, a cartel is comprised of legally independent sellers and producers grouped together to control price, limit supply and limit competition. If a centralized institution is created to coordinate the actions of several independent local or regional monopolies then the arrangement creates a cartel. If there is a formal agreement to collude in order to fix price by oligopolies then this creates a cartel. (Sloman and Sutcliffe, 2001) De Beers diamond, 1999 Vitamin cartel, MLS service, and OPEC are some of the known cartels.
Monopolies are expected to sell their goods at a higher price due to lac ...
Download paper
Not exactly what you need?

Related papers

Oligopoly in the Beer Industry
The U.S. beer industry is dominated by three major brewers: Anheuser-Busch, the makers of Budweiser and Michelob, SAB Miller, and Morson Coors. These three account for over 80% of total beer production and are large breweries with annual shipments of over 15 million barrels (31 gallons per barrel) nationwide and abroad. Most of these breweries are located in Texas, Colorado, Wisconsin, and New…
4 pages (1004 words)
Oligopoly is the ideal market structure because it allows society to benefit from the efficiency gains of both competition and monopoly
The range within which each oligopolist can independently influence prices is, however, narrower than where there is a pure monopoly, for he has to take into account not only the availability of substitutes (as does a pure monopolist as well), but also the likely actions of his principal competitors in his own market.…
6 pages (1506 words)
The Economic Environment of Business
Other market drivers for these milk products are the increased variety of products including flavoured milk, and also the increased advertising efforts by companies. Suppliers and processors of milk products have adopted measures that aid them to act on interest of consumers.…
12 pages (3012 words)
The Theory of Monopoly
Professor of Cambridge University Joan Robinson (1933) made a report with decisive critics of the newly conservative competition conception. In her work 'Economic theory of imperfect competition' she claimed, that the research of various objective laws of the economic theory was usually started with the consideration of the perfect competition' conditions, treating monopoly as the corresponding…
5 pages (1255 words)
Four types of markets: Monopoly, Oligopoly, Monopolistic competition and Perfectly Competitive market
In this case study we see that Quasar Computers face all four types of markets, Monopoly, Oligopoly, Monopolistic competition and Perfectly Competitive market for its product Neutron. Neutron is a computer that enjoys a monopoly market during the first three years due to the patent. In three years time the patent on the “Neutron” expires and another competitor enters the market making the…
2 pages (502 words)
In relation to costs it shows that in an oligopolistic market firms will not raise their prices because even a small price increase will cause them to lose many customers and at the same time a large price decrease by the owners will gain only a few customers because such an action will begin a price war with other firms. The curve is therefore more price-elastic for price increases and less so…
8 pages (2008 words)