Oligopoly

What is the meaning of ‘Concentration ratio’

A proportion of the market supplied by the largest firms in that industry such as nike and adidas

What are effects of high barriers to entry on an oligopolistic market

• Leaving is expensive and high startup costs

• Supernormal profits in the long run

what is the implication of a high concentration ratio on an Oligopoly

• High Market power

• Large firms can leverage their size to restrict competition

What is the implication of interdependence of firms on an Oligopoly

• Actions of one are dependent on actions of another

What is the implication of Product differentiation on an Oligopoly

E.g level of advertising,design and reliability

-Have to compete on non-price factors