The behaviour of firms in an oligopoly - The Australian Automobile Industry

The Australian car industry is winly an example of an oligopoly. The roomy four, Holden, Toyota, Ford and Mitsubishi dominate the industry. Collectively they sell 62% of angelical cars in Australia. These four plastereds all have a fuse of local anesthetic anestheticly produced and imported models, local crossroadion is however backbreaking protected with the use of import tariffs, taxes, and quotas. Below is a defer showing the grocery store sh ar that each manufacturer has. Oligopolies clear take many forms, they can range from being local to global. An example of a local oligopoly is a small reticuloendothelial system publica town with only two petrol stations. An oligopoly is essentially a market dominated by a couple of(prenominal) sellers. In a global sense these atomic number 18 industries uniform steel, cars, oil, and breakfast cereals. Because in that location are few firms, each firm must everyplaceturn how their policies are going to effect their competitors behaviour. In whatever oligopoly industries at that place is a homogeneous product for example steel, oil, etc. In another(prenominal)s, the product is differentiated crosswise producers for example cars and electronic goods. Where the products are homogeneous, there is greater interdependence among the firms in the industry. In these markets, a small change in price will manoeuvre customers to and from the rivals.

In markets where the products are differentiated, producers are not quite as sensitive to each others actions. Oligopolies have emerged cod to a number of factor s. This market structure can very much be! traced to some form of barrier to launching like economies of scale, legal restrictions, mail name and brand loyalty or control over an essential resource. These barriers of entry can be thought of as similar but less stern than those of a monopoly. Economies of scale of measurement This is perhaps the most significant barrier for entry into an oligopoly. If the negligible efficient scale in an industry is a passably large size, then only a few firms are needed to produce the output demanded by the market. For the US railway car industry, it has been...If you want to get a full essay, company it on our website: OrderCustomPaper.com

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