How do firms in an oligopolistic market set their prices? Use specific examples from the simulations or from the textbook to support your claims
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How do firms in an oligopolistic market set their prices? Use specific examples from the simulations or from the textbook to support your claims
Oligopoly is a market structure characterized by a small number of large firms dominating the market. In an oligopolistic market, each firm's actions have a significant impact on the market as a whole, and firms are interdependent in terms of pricing and output decisions.
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- Explain if excess profit will exist in the long run for an oligopolistic market.In an oligopolistic industry there are only a few firms. Is this statement correct? Explain.MARK ALL ANSWERS THAT APPLY: Prices in an oligopolistic market will tend to be: the same as they would be in a monopoly higher than they would be in a monopoly lower than they would be in a competitive market lower than they would be in a monopoly higher than they would be in a competitive market
- If in Ventura county there is an oligopolistic market, where each company has a kinked demand curve, then what will be the effect when one of these companies raises its price?If the firms in a monopolistically competitive market are earning economic profits or losses in the short run, would you expect them to continue doing so in the long run? Why?Example of oligopolistic market structure
- The beer manufacturing industry in the U.S. includes dozens of independent firms. Yet the American beer industry is regarded as one of the most oligopolistic industries in the country. Why is this?Analyze a Monopolistic Competition or Oligopoly Market StructureSuppose you manage a local grocery store, and you learn that a very popular national grocery chain is about to open a store just a few miles away. Use the model of monopolistic competition to analyze the impact of this new store on the quantity of output your store should produce (Q) and the price your store should charge (P). What will happen to your profits? Explain your reasoning in detail. How and why do profits change? What could you do to defend your market share against the new store?
