Question

Using the internet, find and article which discusses an oligopoly industry. In a 1 to 2 page essay, describe the key characteristics which make this an oligopoly market. State your case whether you believe the firms are cooperating, competing, or a little of both. Don’t forget to cite your references.

Answer 1

Because the term oligopoly refers to a market structure consisting of limited competition in which a small number of producers or sellers share. The article I found very interesting about the oligopoly market structure is about the reality of airline competition dominance entitled' Airline competition 1980-2010' from the Travel insider magazine (2018, Aug. 25).

The main features included in this article about an oligopoly market structure; the paper discusses the U.S. airline industry, which is dominated by a tiny amount of big airlines with the four biggest carriers having over 60.1 percent of the complete market (in terms of passenger miles flew)  and so, on the face of it, seem to be in an oligopolistic situation.

Sometimes, oligopolies can be present when companies have smaller market shares than the theory would suggest, other times, oligopolies are not present even when companies have much larger market shares than needed to cross the threshold level for oligopoly.

Not every oligopoly is bad. Some might be nice. In an oligopolistic market, a company's additional profit potential can be used to finance new product development, service improvements, and so on (think pcs for a vivid instance). And because of their big sales volumes, large-scale businesses can enjoy significant economies of scale.

Oligopolies can be even more inefficient than monopolies. Monopolies are more closely subject to legislative and social scrutiny, oligopolies are less visible so can get away with more. Many people don't even know what an oligopoly is, thinking there to be only two types of market - monopolistic and competitive.