Businesses need to respond to a variety of changes:
They include perfect competition on one end, monopoly on the other end, and competitive monopoly and oligopoly somewhere in the middle. In this paper, we will focus on the oligopoly structure because it is one of the strongest influences in the United States market.
Although oligopolies can also be global, we will focus strictly on the United States here. We will write a custom essay sample on Oligopolies in the United States Economy or any similar topic specifically for you Do Not Waste HIRE WRITER We will define oligopoly, give key characteristics important to the oligopoly structure, explain why oligopolies form, then give an example of an oligopoly in todays economy.
Finally, we will discuss the benefits and costs in this type of market structure. Oligopoly is defined as a market structure in which there are a few major firms dominating the market for a specific product or service. For this reason, there is significant friendly competition between firms.
They each know that it is in their own best interests to maintain a stable price, for if they lower their prices, their competitors ill do the same and knock out any advantage the original firm was hoping to gain with lower prices.
If they raise their prices, the competitors will not follow suit and will therefore steal away all the customers of the higher priced product. Another key factor in oligopolies is that there are significant barriers to entry into this market.
These barriers can include things such as high fixed costs, availability of resources, and brand loyalty. Many smaller companies simply do not have the cash or resources to compete with these large firms.
Another characteristic of oligopolies is hat the percentages of market shares change very little from year to year and are dependent upon introduction of new products or acquisitions of smaller companies.
Why and how to oligopolies form? Oligopolies generally form over time as larger companies acquire or buy out smaller ones. They do this in order to gain market presence, new technology, more efficient production methods, etc. Oligopolies are sustained through price competition, brand loyalty, and incessant advertising.
A perfect example of an oligopoly market structure in the United States is seen in the carbonated beverages industry.Oligopolies are prevalent throughout the world and appear to be increasing ever so rapidly.
Unlike a monopoly, where one corporation dominates a certain market, an oligopoly consists of a select.
Oligopolies in the United States Economy Essay this paper, we will focus on the oligopoly structure because it is one of the strongest influences in the United States market.
Although oligopolies can also be global, we will focus strictly on the United States here. Multinational Firms in the World Economy [Giorgio Barba Navaretti, Anthony J.
Venables] on metin2sell.com *FREE* shipping on qualifying offers. Depending on one's point of view, multinational enterprises are either the heroes or the villains of the globalized economy. Governments compete fiercely for foreign direct investment by such companies.
Here is what was said regarding the declining oil price of last year. [snip] The Saker: It is generally accepted that the recession of the Russian economy has rather little to do with the sanctions imposed against her, and that it is mostly the result of the fall in oil prices.
Oligopolies are price setters rather than price takers.
Mergers among airlines have left the industry in the United States dominated by four main entities – Delta Air Lines, United Airlines, Southwest Airlines and American Airlines – which purposely do not compete on some air travel routes.
United States Antitrust law is a collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote fair competition for the benefit of consumers.
(The concept is called competition law in other English-speaking countries.) The main statutes are the Sherman Act of , the Clayton Act of and the Federal Trade.