2 pages/≈550 words
Mathematics & Economics
Oligopoly market structure versus monopolistic competition (Essay Sample)
These papers are to be 300-600 words in proper APA format with in-text citations and a bibliography or reference section. Oligopoly market structure versus monopolistic competition source..
Oligopoly market structure versus monopolistic competition
Oligopolistic and monopolistic competition fall under imperfect competition, and are between the extremes of perfect competition and monopoly, but there are also differences in their market structures. Even though, the differences between the two may not be clear cut, oligopolies tend to have less number of firms that may run as a cartel, while monopolistic competition typically have more firms. The small numbers of oligopolistic firms in an industry use barriers of entry to limit competition, but there are less barriers in the market among monopolistic competition. This paper explores how the two market structures differ in terms of the expected market behavior.
Even though, in the oligopoly market structure there are few large firms, they account for a big percentage of the total output in the industry. Hence, these firms are dominant in the market through concentrated market shares. On the other hand, firms under monopolistic competition have a small market share as the number of firms is high (Taylor, 2008). The increase in the number of firms means that firms seem to acquire features of monopolistic competition market structure; they also have fewer characteristics of an oligopolistic market structure and vice versa.
The barriers to entry and exit for oligopolistic firms lead to abnormal profits in the short run as there is limited completion and firms collude to set the prices (Boyes & Melvin, 2009). In addition, in the long run the firms are able to maintain super profits as entry barriers ensure there is dominance of the few large firms...
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:
YOU MAY ALSO LIKE
- Mental illness Essays
- Water pollution Essays
- Child labor Essays
- Schizophrenia Essays
- Smoking Essays
- Manifest destiny Essays
- Trifles Essays
- Vietnam war Essays
- Ethics Essays
- Globalization Essays
- Kite runner Essays
- Drugs Essays
- Artificial intelligence Essays
- George washington Essays
- The crucible Essays
- Body image Essays
- Discuss the four primary market types and how they differ. Give an example of each type firm. . .Description: Discuss the four primary market types and how they differ. Give an example of each type firm. Essay ...2 pages/≈550 words | 2 Sources | APA | Mathematics & Economics | Essay |
- Macroeconomics: The Theory of Aggregate Supply and Aggregate DemandDescription: Macroeconomics: The Theory of Aggregate Supply and Aggregate Demand...2 pages/≈550 words | 2 Sources | APA | Mathematics & Economics | Essay |
- National economiesDescription: Discuss how national economies interact with each other to achieve their individual economic goals Essay...2 pages/≈550 words | 2 Sources | APA | Mathematics & Economics | Essay |