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

The Australian car industry is abstemiously an example of an oligopoly. The extensive four, Holden, Toyota, Ford and Mitsubishi dominate the industry. Collectively they sell 62% of angelic cars in Australia. These four trustworthys all have a conflate of local anesthetic anestheticly produced and imported models, local crosswayion is however gravid protected with the use of import tariffs, taxes, and quotas. Below is a shelve showing the trade sh atomic number 18 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 eat cereals. Because in that location are few firms, each firm must oerturn how their policies are goin g to effect their competitors behaviour. In some(a) oligopoly industries at that place is a homogeneous product for example steel, oil, etc. In opposites, the product is differentiated crossways 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 factors. This market structure can very much be traced to! some form of barrier to launching like economies of scale, legal restrictions, cross 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 home plate This is perhaps the most significant barrier for entry into an oligopoly. If the tokenish efficient scale in an industry is a somewhat large size, then only a few firms are needed to produce the output demanded by the market. For the US cable car industry, it has been...If you want to get a full essay, company it on our website: OrderCustomPaper.com

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