Oligopoly - a market dominated by a few very large firms
Main features
- Interdependence - if one of the firms increase sales others decrease sales
- barriers to entry - set up cost are normally quit high
- price rigidity - prices stays the same for quite a long time
- non price competition - since firms want to avoid price wars, they will try to not compete in price
- economies of scale - dominant firms benefits from the economics of scale
- collusion - informal agreement between firms to restrict competition
Main features
- Interdependence - if one of the firms increase sales others decrease sales
- barriers to entry - set up cost are normally quit high
- price rigidity - prices stays the same for quite a long time
- non price competition - since firms want to avoid price wars, they will try to not compete in price
- economies of scale - dominant firms benefits from the economics of scale
- collusion - informal agreement between firms to restrict competition
https://www.youtube.com/watch?v=oH_lM03xyyk&feature=youtu.be