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The price and quantity of a good or service that a business should produce. Whether to invest in training current staff or to look into the market. When to purchase or retire fleet equipment. Decisions regarding understanding the competition between two firms based on the motive of profit maximization. [13]
Economies of scale occur where a firm's average costs per unit of output decreases while the scale of the firm, or the output being produced by the firm, increases. [32] Firms in an oligopoly who benefit from economies of scale have a distinct advantage over firms who do not.
A special type of Oligopoly, where two firms have exclusive power and control in a market. Both companies produce the same type of product and no other company produces the same or alternative product. The goods produced are circulated in only one market, and no other company intends to enter the market.
In this model, two companies, each of which chooses its own quantity of output, compete against each other while facing constant marginal and average costs. [3] The market price is determined by the sum of the output of two companies. () = is the equation for the market demand function. [4] Market with two firms i = 1, 2 with constant marginal ...
There is more than one firm and all firms produce a homogeneous product, i.e., there is no product differentiation; Firms do not cooperate, i.e., there is no collusion; Firms have market power, i.e., each firm's output decision affects the good's price; The number of firms is fixed; Firms compete in quantities rather than prices; and
These criteria include; all firms contribute insignificantly to the market, [5] all firms sell an identical product, all firms are price takers, market share has no influence on price, both buyers and sellers have complete or "perfect" information, resources are perfectly mobile and firms can enter or exit the market without cost. [6]
An oligopsony (from Greek ὀλίγοι (oligoi) "few" and ὀψωνία (opsōnia) "purchase") is a market form in which the number of buyers is small while the number of sellers in theory could be large. This typically happens in a market for inputs where numerous suppliers are competing to sell their product to a small number of (often large ...
In dominant firm price leadership, the price leader is the biggest firm. In barometric firm price leadership, the most reliable firm emerges as the best barometer of market conditions, or the firm could be the one with the lowest costs of production, leading other firms to follow suit. Although this firm might not be dominating the industry ...