State any five (5) distinguishing characteristics of an oligopoly market structure

Marketing Jan 09, 2021

State any five (5) distinguishing characteristics of an oligopoly market structure.

Expert Solution

A few sellers: An oligopoly market is normally dominated by a few firms. For instance, the Australian supermarket sector is an oligopoly market dominated by two firms, that is, Coles and Woolworths.
Interdependence among firms: Activities of one firm impacts the revenue of other firms. As a result, a firm always watches the marketing activities of rival firms and respond accordingly.
High barriers to entry: This type of market has significant barriers to entry. Some of the sources of the barriers to entry include economies of scale, government policies, and control of key inputs.
Kinked demand curve: The kinked demand curve in oligopoly help to explain why prices are often rigid in this type of market structure.
Nature of product: The products in an oligopoly market can either be homogenous or differentiated.

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote