Oligopolies

Assignment 3 Oligopolies Dan Daugherty ECO204 Principles of Microeconomics Hugo A. Villegas September 27, 2010 For each of the following, state whether you find out or disagree. Explain your reasoning. a. Oligopolies ar always bad for party. b. The beer perseverance has a few king-size firms and m all small firms. Therefore, we would non call it an oligopoly. Part a. It is c atomic number 18less to generalize about any system particularly oligopolies. While by definition oligopolies vista like restrictive systems, An oligopoly is an industry dominated by a few firms that, by virtue of their individual sizes, are large enough to influence market price. The behavior of a hotshot oligopolistic firm depends on the reactions it expects of all the other firms in the industry. industrial strategies usually are very complicated and difficult to generalize about.(Case, Fair, & Oster page 284) Economists are very much divide as to how good or bad they are for society in general. In general without some kind of sinful dealings amongst competitors, it is difficult if not impossible to control the market entirely. One business cannot gamble on what they think their competitors great power do with any accuracy. Firms are often both buyers and sellers in the marketplace and are faced with the same competition for inputs as are others.

It can also be said that larger firms have more resources for innovation and fear of competition fuels this activity. So, are oligopolies always bad for society? I would have to rank no, there are of course cases that are bad just not always. Part b. Again by definition as cited earlier the beer industry is an oligopoly. (Case,Fair page 285) The chart above shows that breweries are dominated by four large firms with 90% of the market. The earth of many other firms in the industry is not really that relevant to the question. References Case, K. E., Fair, R. C., & Oster, S. E. (2009). Principles of microeconomics      (9th ed.).... If you want to get a to the full essay, order it on our website: Orderessay

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