The market for reteail banking in New Zealand best illustrates:
a)monopoly
b)duopoly
c)oligopoly
d)monopolistic competition
To determine which market structure best illustrates the market for retail banking in New Zealand, we need to understand the characteristics of each option listed.
a) Monopoly: A monopoly occurs when there is only one single supplier or producer in a market, with no close substitutes. The market is entirely controlled by this sole provider.
b) Duopoly: A duopoly refers to a market structure in which there are only two competing firms that dominate the market. Each firm has a significant market share and can influence prices and competition.
c) Oligopoly: An oligopoly exists when a small number of firms dominate a particular market. These firms have a significant market share, and their actions can directly affect the prices and behaviors within the market.
d) Monopolistic competition: Monopolistic competition occurs when there are many firms competing in the market, offering slightly differentiated products. Each firm has some degree of market power, but there are also substitutes available to consumers.
In the case of retail banking in New Zealand, it can be argued that the market structure best illustrated is "oligopoly." The retail banking sector in New Zealand is primarily dominated by a small number of major banks, including ASB, ANZ, BNZ, and Westpac, among others. These banks hold significant market share and have a substantial influence on the market's behavior and competition.
To arrive at this conclusion, one would need to analyze the market structure by examining the number of firms, their relative market shares, the extent of competition, and the level of control they have over prices and the market as a whole. In the case of New Zealand's retail banking sector, it is evident that a few large players dominate the market, suggesting an oligopoly market structure.