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Oligopolistic firms must take into consideration the possible reactions of all competing firms and the firms' countermoves. [27] Every oligopolistic company with strong commodity homogeneity in its industry is reluctant to raise or lower prices, as competing firms will be aware of a firm's market actions and will respond appropriately.
Such competition would be otherwise known as quality competition where oligopolistic firms depend on their quality improvement intensities to survive. [5] In order to distinguish themselves well, these firms can compete in price, but more often, oligopolistic firms engage in non-price competition because of their kinked demand curve. In the ...
Oligopoly: If the industry structure is oligopolistic (that is, has few major competitors), the players will closely monitor each other's prices and be prepared to respond to any price cuts. [8] Applying game theory, two oligopolistic firms that engage in a price war will often find themselves in a kind of prisoner’s dilemma. Indeed, if Firm ...
The airline industry is known for ruthless competition, market share-grabbing price wars, and headline-making bankruptcies. ... It has formed them in a way that is oligopolistic in nature but ...
Furthermore, because high-tech industries have an oligopolistic nature, they support only a small number of firms; the entry of new firms into the sector must cause other firms to exit. Thus, government policies that promote the creation of a successful industry in one country undermine the established industry in other countries. [8]
An oligopoly where each firm acts independently tends toward equilibrium at the ideal, but such covert cooperation as price leadership tends toward higher profitability for all, though it is an unstable arrangement. There exist two types of price leadership. [14] In dominant firm price leadership, the price leader is the biggest firm.
These three stocks collectively account for much of the large oligopoly in semiconductor equipment, and each stock has had excellent long-term returns as a result. ... the chip industry should ...
Oligopoly: The number of enterprises is small, entry and exit from the market are restricted, product attributes are different, and the demand curve is downward sloping and relatively inelastic. Oligopolies are usually found in industries in which initial capital requirements are high and existing companies have strong foothold in market share.