The paper “ Is UK Supermarket Sector an Oligopoly? ” is a well-turned example of the literature review on business. Markets act as a controlling agent across every economy. This is because they control how we spend, prices of goods as well as controlling entry and exit into the market. The market structure enables an organization to determine its prices, output, and the number of profits the business might get. The above study evaluates the statement which shows that the UK supermarket industry is an oligopoly. There are four major market structures that include perfect competition, monopolistic competition, and oligopoly, and finally the monopoly market structure.
The perfect competition market is one that is comprised of many buyers and sellers who trade similar goods. These do not have much effect on the price prevailing in the market since there are a large number of firms operating in this market (Aumann 1994, pp. 39-50). Customers do not choose what to buy since the products are similar. In order to survive in this market, two factors are important which include having perfect knowledge and perfect mobility about every product.
Perfect knowledge involves having a wider view of the economic opportunities available. Clifton (2007, pp. 137-151) describes that perfect mobility is having a motive if changing an opportunity into a benefit. The monopolistic competition is a market structure that involves many buyers and sellers. These sell their goods at varying prices. This difference in price occurs as a result of the presence of differentiated goods. Some of these differences appear in customer segmentation, the use of varieties of branding and advertising. A monopoly is the type of industry that produces products with no close substitutes.
This market is also characterized by a few barriers of entry and exit in which other people find it difficult to compete with the firm. Frank (2002) shows that one example is the City cell which had specialized in the production of mobile services in Bangladesh. The company was the first to offer these services and enjoyed the benefits of monopoly until the time Grameen phone was introduced as a competitor. An oligopoly type of market is characterized by a few suppliers. Firms operating take a large percentage of market concentration and produce branded products.
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