Market Structures 3: Oligopolies
The characteristics, behaviour and transport relevance of oligopolistic markets
- Created by: TessAni
- Created on: 19-01-13 11:15
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- Oligopolies
- Characteristics
- High concentration ratio
- Price Rigidity - risks + uncertainties
- Profit maximisation may not be firms objectives
- Interdependence
- non-price competition in order to gain market share
- High Barriers to Entry
- Kinked Demand
- Behaviour
- Theory of Kinked Demand
- Game Theory
- Decisions are made based on assumptions as to how other firms will react
- Price makers /risks because of competitors
- Therefore prefer non-price competition
- Branding, customer service, location, range of products
- Therefore prefer non-price competition
- Remember Kinked Demand is the theory not the reality
- Collusion -tacitly or otherwise
- Transport Relevance
- Generally most real-life market structure
- Ferry Companies
- Bus Market post deregulation
- Rail companies - with recent govt. policy reducing number of firms
- Scheduled airlines - through alliances
- Characteristics
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