Ever wish YOU could set the price for your product? Tired of competition beating down your pricing options? Perhaps it is time to consider being a leader in an oligopoly. Here YOU are the price setter. Are you in? Ready to take fist fulls of cash to the bank? Not so fast, El Guapo!Entrance in an oligopoly is extremely difficult. Make sure you are prepared for the economies of scale. A patent and access to expensive technology goes a long way too. Hopefully, when you were in grade school you received high marks for "Gets Along Well With Others". In an oligopolistic situation there are so few firms that the actions of one will surely impact the others. Were you a Chess Club Champion? Good, because you will need that expertise in considering your actions, how they will impact you, how they will impact your competition, how your limited competitors will react to your action, and how their reaction to your action will impact you. And so on. Bascially its a LOT of interdependence.
Okay. Ready to test your knowledge on the subject?
Sample Test Question Task 1-A-1:
Which of the following markets or industries would NOT be considered as oligopolistic:
A) US cellular phone market
B) Personal computer market
C) Steel industry
D) Automobile industry
Feel free to discuss in the comments section. Answer to come tomorrow.
1 comment:
Answer: B.
The personal computer market would NOT be considered as oligopolistic.
It does not possess strong barriers to entry and pricing between competitors is extremely competitive.
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