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Oligopoly - Concept, Definition, Characteristics, Classification, Price and Output, Emergence (Eng Rec.)
Abstract
When any market has only a few large sellers, that is called Oligopoly. Such market situation is responsible for a few large firms sell either homogeneous or differentiated products. Several characteristics of Oligopoly has discussed below. There is no general theory that can explain price and output determination in all kinds of oligopoly situations. Thus, it is said that price and output under oligopoly are indeterminate.
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What is Oligopoly?
Oligopoly is a market situation with only a few large sellers the word oligopoly is derived from two Greek words 'Oligoi' means 'few' and 'poly’ means 'control’. Thus, oligopoly is a market situation where a few large firms sell either homogeneous or differentiated products In India, there are several examples of oligopoly like Airlines, (Air India, Indian Airlines, Jet Airways, Sahara Airways) Automobile producers (Maruti, Hindustan, Tata, Mahendra and Mahendra, Ceilo). There is a great deal of interdependence among them. Each oligopolist formulates its policies regarding price or output with an eye to their effect on its rivals. A firm's price or output influences the sales and profits of competitors. Because of their interdependence, oligopolists face a situation in which the optimal decision of one firm depends on what other firms decide to do, and in which there is an opportunity for both conflict and cooperation. The special case of a market dominated by two firms is called a 'Duopoly’.
Definitions
In the words of P.C. Dooley, "An oligopoly is a market of only a few sellers, offering either homogenous or differentiated products. There are so few sellers that they recognize their mutual dependence."
In the words of Mansfield, "Oligopoly is a market structure characterized by a small number of firms and a great deal of interdependence."
According to Grinols, "An oligopoly is a market situation in which each of a small number of interdependent, competing producers influences but do not control the market."
In the words of McConnell, "Oligopoly is a market situation in which number of firms in an industry is, so small that each must consider the reactions of rivals in formulating its price policy."
Characteristics or Assumptions of Oligopoly
The following are the main characteristics or assumptions of oligopoly:
(1) Few Sellers and Many Buyers: Oligopoly is a market structure in which few firms dominate the industry. For example, in India four companies Maruti, Hyundai, Cielo, and Tata, produce 90 percent of small cars. The products sold by oligopolist firms...
Read More...
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By Sivananda PandaAbstract
When any market has only a few large sellers, that is called Oligopoly. Such market situation is responsible for a few large firms sell either homogeneous or differentiated products. Several characteristics of Oligopoly has discussed below. There is no general theory that can explain price and output determination in all kinds of oligopoly situations. Thus, it is said that price and output under oligopoly are indeterminate.
Visit Website: Commerceya
Subscribe on Youtube: Commerceya
What is Oligopoly?
Oligopoly is a market situation with only a few large sellers the word oligopoly is derived from two Greek words 'Oligoi' means 'few' and 'poly’ means 'control’. Thus, oligopoly is a market situation where a few large firms sell either homogeneous or differentiated products In India, there are several examples of oligopoly like Airlines, (Air India, Indian Airlines, Jet Airways, Sahara Airways) Automobile producers (Maruti, Hindustan, Tata, Mahendra and Mahendra, Ceilo). There is a great deal of interdependence among them. Each oligopolist formulates its policies regarding price or output with an eye to their effect on its rivals. A firm's price or output influences the sales and profits of competitors. Because of their interdependence, oligopolists face a situation in which the optimal decision of one firm depends on what other firms decide to do, and in which there is an opportunity for both conflict and cooperation. The special case of a market dominated by two firms is called a 'Duopoly’.
Definitions
In the words of P.C. Dooley, "An oligopoly is a market of only a few sellers, offering either homogenous or differentiated products. There are so few sellers that they recognize their mutual dependence."
In the words of Mansfield, "Oligopoly is a market structure characterized by a small number of firms and a great deal of interdependence."
According to Grinols, "An oligopoly is a market situation in which each of a small number of interdependent, competing producers influences but do not control the market."
In the words of McConnell, "Oligopoly is a market situation in which number of firms in an industry is, so small that each must consider the reactions of rivals in formulating its price policy."
Characteristics or Assumptions of Oligopoly
The following are the main characteristics or assumptions of oligopoly:
(1) Few Sellers and Many Buyers: Oligopoly is a market structure in which few firms dominate the industry. For example, in India four companies Maruti, Hyundai, Cielo, and Tata, produce 90 percent of small cars. The products sold by oligopolist firms...
Read More...