Oligopoly is a market structure in which only a few enterprises can prevent the others from exerting considerable influence. The concentration ratio is a measure of the largest companies' market share. One firm is a monopoly, two firms are a duopoly, and two or more firms are an oligopoly. The number of firms in an oligopoly has no definite upper limit, but it must be small enough that the activities of one firm have a considerable impact on the others. Steel corporations, oil companies, railways, tyre companies, grocery store chains, and cellular providers have all been oligopolies in the past. An oligopoly, according to economic and legal concerns, can stifle new entrants, limit innovation, and raise prices, all of which affect consumers. Instead of collecting prices from the market, firms in an oligopoly determine pricing, whether collectively (in a cartel) or under the leadership of a single enterprise. As a result, profit margins are higher than in a more competitive market. Explain how a dishonest oligopolist would determine its profit-maximizing pricing and output levels if it tried to undercut other oligopolistic enterprises' prices.
Oligopoly is a market structure in which only a few enterprises can prevent the others from exerting considerable influence. The concentration ratio is a measure of the largest companies' market share. One firm is a monopoly, two firms are a duopoly, and two or more firms are an oligopoly. The number of firms in an oligopoly has no definite upper limit, but it must be small enough that the activities of one firm have a considerable impact on the others. Steel corporations, oil companies, railways, tyre companies, grocery store chains, and cellular providers have all been oligopolies in the past. An oligopoly, according to economic and legal concerns, can stifle new entrants, limit innovation, and raise prices, all of which affect consumers. Instead of collecting prices from the market, firms in an oligopoly determine pricing, whether collectively (in a cartel) or under the leadership of a single enterprise. As a result, profit margins are higher than in a more competitive market. Explain how a dishonest oligopolist would determine its profit-maximizing pricing and output levels if it tried to undercut other oligopolistic enterprises' prices.
Chapter1: Making Economics Decisions
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![Oligopoly is a market structure in which only a few enterprises can prevent the others from
exerting considerable influence. The concentration ratio is a measure of the largest companies'
market share. One firm is a monopoly, two firms are a duopoly, and two or more firms are an
oligopoly. The number of firms in an oligopoly has no definite upper limit, but it must be small
enough that the activities of one firm have a considerable impact on the others.
Steel corporations, oil companies, railways, tyre companies, grocery store chains, and cellular
providers have all been oligopolies in the past. An oligopoly, according to economic and legal
concerns, can stifle new entrants, limit innovation, and raise prices, all of which affect
consumers. Instead of collecting prices from the market, firms in an oligopoly determine pricing,
whether collectively (in a cartel) or under the leadership of a single enterprise. As a result, profit
margins are higher than in a more competitive market.
Explain how a dishonest oligopolist would determine its profit-maximizing pricing and output
levels if it tried to undercut other oligopolistic enterprises' prices .](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6dfba38e-e3c0-4e10-8301-0850c9b1bc2e%2Fc7be9e30-a732-456f-8dca-c62c82402dc4%2F52nxkh_processed.png&w=3840&q=75)
Transcribed Image Text:Oligopoly is a market structure in which only a few enterprises can prevent the others from
exerting considerable influence. The concentration ratio is a measure of the largest companies'
market share. One firm is a monopoly, two firms are a duopoly, and two or more firms are an
oligopoly. The number of firms in an oligopoly has no definite upper limit, but it must be small
enough that the activities of one firm have a considerable impact on the others.
Steel corporations, oil companies, railways, tyre companies, grocery store chains, and cellular
providers have all been oligopolies in the past. An oligopoly, according to economic and legal
concerns, can stifle new entrants, limit innovation, and raise prices, all of which affect
consumers. Instead of collecting prices from the market, firms in an oligopoly determine pricing,
whether collectively (in a cartel) or under the leadership of a single enterprise. As a result, profit
margins are higher than in a more competitive market.
Explain how a dishonest oligopolist would determine its profit-maximizing pricing and output
levels if it tried to undercut other oligopolistic enterprises' prices .
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