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Oligopoly and Monopolistic Competition. What you will learn. Oligopoly. Monopolistic competition. Take this challenge. sellers. MARKET. sellers. Oligopoly. Oligopoly is a market structure with several ________ sellers. dominant.

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Oligopoly and Monopolistic Competition

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Oligopoly and monopolistic competition

Oligopoly and

Monopolistic Competition


Oligopoly and monopolistic competition

What you will learn...

Oligopoly

Monopolistic competition

Take this challenge


Oligopoly

sellers

MARKET

sellers

Oligopoly

Oligopoly is a market structure with several ________ sellers.

dominant

A market structure with only two sellers is called a _______.

duopoly


Oligopoly1

______ dominant sellers.

Oligopolistic sellers tend to sell heterogeneous goods.

Sellers are interdependent.

Entry is _________________.

________ information of the market.

Oligopoly

Features

Several

restricted or difficult

Imperfect


Oligopoly2

They can choose what _____ to set to maximise their ______.

Oligopolists are ____________. If one seller lowers the price to attract more customers, other sellers will follow.

So _________ may break out.

Oligopoly

1. Oligopolistic sellers are price-searchers

Behaviour of firms

price

profits

2. The possibility of a ‘price war’

interdependent

price wars


Oligopoly3

The dominant sellers may act as ______ in setting ______.

The ___________ will then follow.

$

$

price

price

Oligopoly

3. Price leadership

Behaviour of firms

leaders

prices

smaller firms


Oligopoly4

Firms often engage in __________________ .

Example

Lucky draws organised by a supermarket.

Oligopoly

4. Non-price competition

Behaviour of firms

non-price competition


Monopolistic competition

A large number of _____ and ______

____________ goods

Perfect / Imperfect

information of the market

____ entry and exit

Monopolistic Competition

Monopolistic competition is a market structure with the features of both ________________ and _________

___________.

perfect competition

imperfect

competition

Features similar to

perfect competition

Features different from

perfect competition

sellers

Heterogeneous

buyers

Free


Oligopoly and monopolistic competition

Monopolistic competitors are price-________.

_________ competition

Monopolistic Competition

Behaviour of firms

searchers

As the firms sell differentiated products, they can choose what ______ to set to maximise their ______.

price

profits

Non-price


Oligopoly and monopolistic competition

Q

Hutchison Global Communications

PCCW

New World Telecom

New T&T

Take this challenge 1

Identify the market structure of the International Direct Dialing (IDD) services in Hong Kong.

Oligopoly

The market is dominated by several major sellers like:


Oligopoly and monopolistic competition

Q

Take this challenge 2

Suppose the costs of providing IDD services are lower due to technological progress. If PCCW lowers its price, what will be the actions of other IDD service providers?

Since the market structure of IDD services is an oligopoly, the decisions made by firms will be _______________.

interdependent

Other firms will _____ their prices when PCCW lowers its prices.

lower


Oligopoly and monopolistic competition

Q

______ number of stalls in Hong Kong

entry into the market is _____ as only a small amount of capital is required

goods sold in different stalls are regarded as ______________ by consumers

__________ information of the market

Take this challenge 3

What is the market structure of newspaper stalls in Hong Kong? Explain.

It is _______________________ as the features of both ___________________ and ______________________ exist:

monopolistic competition

perfect competition

imperfect competition

large

easy

heterogeneous

imperfect


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