Why do oligopolies exist? list five or six oligopoists whos products are owned or regurlarly purchased. What distinguishes an oligopoly from monopolistic competition.
Explain why monopoistically copetitive firms frequently perfer non-price competition to price competition. Do you agree? Why?
Oligopolies exist for several reasons, including barriers to entry, economies of scale, and strategic behavior among firms. To identify five or six oligopolists and their products, you can follow these steps:
1. Identify industries dominated by a few major players. Such industries usually have a high concentration ratio.
2. Conduct online research or refer to industry reports to identify specific companies within those industries.
3. Verify if these companies indeed operate in an oligopoly by confirming their market share and influence in the industry.
Here are five examples of oligopolists:
1. Apple Inc. (products: iPhones, iPads, Macs)
2. The Coca-Cola Company (products: Coca-Cola beverages)
3. Samsung Electronics (products: smartphones, televisions, home appliances)
4. Boeing (products: commercial airplanes)
5. Procter & Gamble (products: personal care products, cleaning supplies, etc.)
When distinguishing oligopolies from monopolistic competition, consider the following factors:
1. Number of Firms: Oligopolies have a small number of firms, whereas monopolistic competition has many firms.
2. Market Share: Oligopoly firms often hold a significant market share, while in monopolistic competition, no firm dominates the market.
3. Product Differentiation: Monopolistic competition involves firms differentiating their products to some extent, while oligopolies may or may not have differentiated products.
4. Barriers to Entry: Oligopolies typically have high barriers to entry, making it challenging for new firms to enter, while entry barriers in monopolistic competition are generally low.
Regarding your question about why monopolistically competitive firms prefer non-price competition over price competition, the primary reason is product differentiation. In monopolistic competition, firms distinguish their products through branding, packaging, advertising, and other non-price factors. By doing so, they can create a perceived value and establish customer loyalty. Engaging in non-price competition allows firms to differentiate themselves from rivals without engaging in price wars, which could harm their profitability.
As an AI, I don't have personal opinions. However, I can say that the preference for non-price competition over price competition in monopolistic competition is based on the assumption that customers value differentiation in products and are willing to pay a premium for it. Whether this approach is effective depends on various factors, including the specific industry and target market.