Essays on Business Economice////////// Assignment

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Table of ContentsIntroduction …………………………. ... …... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... 2Theories ………………………………. .... .... .... .... .... .... .... ……………………………2The Demand Curve …………………………………………………. .... .... .... .………. 3Supply and Demand ………………………………………. .... .... .... .... .... .... .... .... .... .... .5The Analysis of Oligopoly ………………………………………………………. .... ... 6Conclusion ………………………………………………………. .... .... .... .... .... .... .... .... 7References ……………………………………………. .... .... .... .... .... .... .... .... .... .... .... …7Business EconomicsWhat are the main features of an oligopolistic market and how do firms in these markets attempt to compete with each otherIntroductionWhen the market is dominated by just some large suppliers around, then it is called Oligopoly. This kind of market is very tough to compete within each other and outside of it as the entry inside is a big hazard. And, inside this market tough advertising and marketing strategies are important to stay alive and stay competing.

These firms normally produce brands and these brands normally compete within each other. (Donald, 2010)Normally, the game theory is taken into effect by some economists to study these kinds of effects in such markets as each brand supplier has to deal with interdependence, and they must take into account the effects of the other suppliers and be definitely affected by it. In this theory normally, the decision makers take in to account the decision of other decision makers as it actually helps in determining different factors and political coalitions between them which is healthy in a way and which is also not so effective at the same time.

And this game basically becomes the struggle for survival. Main Characteristics: Firms producing brands normallyAll the firms even though only a few selling the same products  There are a very few entries inside this kind of market so there are numerous profits for firms There is high interdependence of the firms within each other as the price change by one firm highly effects and affects the others in this kind of oligopolistic marketTheories: (1) Firms normally cooperate with each other to charge one common price to the customers and then this way every firm gets the whole bunch of profit. (2) Their basic aim is to compete with the prices so that the price and profits remain the same for all. (3) The competitive ends of scale would be observed once the price and the profits will have a monopoly in this market.

(Jerry, 2010)  The competition between the firms is in the form of market share and the demand from most of the consumers and customers, which is why one firm might reduce the price a little to give most of them a discount which is totally against the ethic with the other interdependent firms.

However this way the competition would grow and the watch out will be performed more vigorously so that the market share and the profit is regularly distributed evenly. So, this is called a Price Competition. But there is another form of competition called Non-price competition that basically talks about different other strategies to increase the profits and the market share. Take an example of the British Supermarket Industry where this strategy of non-price has become increasingly effective: Loyalty Cards  Financial Services and Banking facilities  The Post offices and chemists Home delivery systems  Petrol selling on discounted prices at the hypermarkets

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