If any firm reduces its price, the other firms also follow the same to remain in the competition.Īdvertising is a powerful instrument in the hands of oligopolists. Under an oligopoly market, the seller has to be cautious with respect to any action taken by the competing firms. Therefore, they dominate the market and have considerable control over the price of the product. Under an oligopoly market, there are a few firms or sellers who control the entire supply in the market. For example, mobile service providers, cement companies, etc. It is that market where there are a few firms (sellers) in the market producing either a homogeneous product or a differentiated product. The term oligopoly is derived from the Greek words ‘Oligo’ which means few and ‘poly’ which means sellers.
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