Assignment Nos. 11 Oligopoly

Joana Marie H.
Usop
BSA-ABM7
Assignment Nos. 10 Oligopoly
What do you think is/are the importance of understanding the oligopolistic competition in
the market.
Oligopoly is an important form of imperfect competition and known as the “Competition

among the Few”. Oligopoly is said to exist when there are few firms or sellers in the market
producing or selling a product. Because of the structure of oligopolies, new firms typically find it
difficult to penetrate into oligopolistic markets due to the reason that there is a strong competition
from well-established and successful large firms that dominate the space and their competitive and
wide-ranging product and service offerings, including premium and mass market.
It is important to understand the oligopolistic competition because breaking into an

oligopoly is a challenge especially when new companies with similar offerings in the market. The
only firms that typically manage to do so are those with significant funding, an oligopolistic market
requires large amounts of capital to operate in.
How does economists/managers benefits in understanding this market typology.
The extra profits earned from an oligopoly of the economist/managers can go into research
and development. When an economy experiences an oligopoly in some way, then it can create a
dynamic set of products and processes through a desire to be innovative. Because the level of
profits is often super-normal in this state, the extra funds can funnel toward research and
development projects that can help consumers in a variety of ways. We often see this advantage
when looking at the outcomes presented by the pharmaceutical industry as the higher cost of
medication helps to fuel new research into drugs that could help to reduce the impact of disease.
Are the following company an example of an oligopolistic competition? If your answer is yes
or no. Support your claim with facts and data. (Shell, Microsoft, Google, Meralco, Honda
Car).
Oligopolies exist naturally or can be supported by government forces to better manage an

industry. Customers can experience higher prices and inferior products because of oligopolies,
but not to the extent they would through a monopoly, as oligopolies still experience competition.
And for me, yes, Shell, Microsoft, Google, Meralco, Honda Car are examples of Oligopolistic
competition. For example, the Google. Google is known as Big Tech, it is a operating systems for
smartphones and computers provide excellent examples of oligopolies in big tech. Apple iOS and
Google Android dominate smartphone operating systems, while computer operating systems are
overshadowed by Apple and Microsoft Windows. Big tech also is concentrated on the Internet,
with Google, Meta (formerly Facebook), and Amazon dominating. Another example is Honda,
Honda belongs to Automakers. Automobile manufacturing is another example of an oligopoly,
with the leading auto manufacturers worldwide there are perhaps a dozen key automakers
including Toyota, Honda, Volkswagen Group, and Renault-Nissan-Mitsubishi.
The examples above may be among the most obvious, but you are likely to find just a small
number of large players across a wide swath of the economy. Food manufacturers, chemical
companies, apparel, and supermarket chains are just a few more to look out for.
How do oligopolistic company determines its price and earn profit in the market. Explain
and support your answers.
When thinking about oligopolistic companies, it’s important to note that these are the firms
that operate in an oligopolistic market. The businesses are generally the trend and price setters,
seeking out and forming partnerships and deals that establish prices that are higher than the ruling
companies’ marginal costs. It means that oligopoly firms set prices to maximize their own profit.
Ultimately, it leads to partnerships and collaborations that foster success for themselves and other
firms, specifically smaller companies operating within the same market or industry.
Companies in oligopolistic industries include such large-scale enterprises as automobile

companies and airlines. As large firms supplying a sizable portion of a market, these companies
have some control over the prices they charge. But there’s a catch, because products are fairly
similar, when one company lowers prices, others are often forced to follow suit to remain
competitive. You see this practice all the time in the airline industry, When Cebu Pacific Airlines
announces a fare decrease, Philippine Air Asia, Philippine Airlines and others do likewise. When
one automaker offers a special deal, its competitors usually come up with similar promotions.
Because there is no dominant force in the industry, companies may be tempted to collude
with one another rather than compete, which keeps non-established players from entering the
market. This cooperation makes them operate as though they were a single company. While not
a single-company-dominated monopoly, oligopolies erect significant barriers to entry, effectively
keeping out new upstarts from becoming competitors. Companies have the power to fix prices
and create product scarcity without competition, which can lead to inferior products and services
and higher costs for buyers.

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Joana Marie H.

Assignment Nos. 10 Oligopoly

Oligopoly is an important form of imperfect competition and known as the “Competition

It is important to understand the oligopolistic competition because breaking into an

How does economists/managers benefits in understanding this market typology.

Oligopolies exist naturally or can be supported by government forces to better manage an

Companies in oligopolistic industries include such large-scale enterprises as automobile

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