Transcription of Market Structure: Oligopoly (Imperfect Competition) - …
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Market Structure: Oligopoly (Imperfect Competition) - …
Market structure : Oligopoly ( imperfect competition ). I. Characteristics of Imperfectly Competitive Industries A. Monopolistic competition large number of potential buyers and sellers differentiated product (every firm produces a different product). buyers and sellers are small relative to the Market no barriers to entry or exit B. Oligopoly large number of potential buyers but only a few sellers homogenous or differentiated product buyers are small relative to the Market but sellers are large barriers to entry C. What is product differentiation? Product differentiation occurs when firms sell similar but not identical products.
market power is lack of competition. An example of a pure oligopoly would be the steel industry, which has only a few producers but who produce exactly the same product. • Impure oligopoly – have a differentiated product. Impure because have both lack of competition and product differentiation as sources of market power.
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