Market Structure Essay

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Market Structure: Oligopolies - Activity How far does the theory of oligopoly match with the reality? A case study approach In studying market structures one of the most commonly used case study examples explore oligopolies; the reason is because they are so predominant in modern business. Oligopolies refer to a market structure where an industry is dominated by a small number of large sellers. It follows that these sellers are also dominant buyers in the industry too - this is termed 'oligopsony'. The aim of this Activity is to investigate some examples of oligopolistic markets and to draw some conclusions about how accurate the theory of oligopoly is in reality. The following are all good examples of industries that have an oligopolistic market structure: Your Task Choose one of the above markets and research the following aspects: * What is the concentration ratio of the industry? * Consider the nature of the competition in the industry - is there evidence of kinked demand curves, non-price competition, branding and so on? * Is there any evidence of collusion in the industry? * Is there a price leader in the market? * Is there evidence that abnormal profits exist in the industry? * What barriers to entry can you identify in the industry? * What evidence of interdependence exists in the industry? Having collated the information above (some of which will be easier to find than others) present a report of 1000 words on the nature of oligopoly and the extent to which the industry you have chosen reflects the theory of oligopolistic market structures. * Groceries * Bookstores * Detergents * Television Providers * Mobile phone networks * US Auto

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