Oligopoly & Monopolistic Competition

1. Oligopoly & Monopolistic Competition

2. sellers MARKET sellers Oligopoly Oligopoly is a a market structure with several _________ sellers. dominating A market structure with only two sellers is called a _______. duopoly

3. ______ dominant sellers. Sellers are interdependent. Oligopolists sell heterogeneous or homogeneous goods. Entry is _________________. ________ information of the market. Oligopoly Features Several restricted or difficult Imperfect

4. Firms can influence ______. They have to search for a price which maximises their ______. Oligopolists are ____________. If one firm lowers the price, others will follow. So _________ may break out and some firms may go out of business. Oligopoly 1. Oligopolists are price searchers Behaviour of firms prices profits 2. The possibility of price war interdependent price wars

5. In some oligopolistic markets, dominant sellers may act as ______ in initiating ____________. The ___________ will then follow. $ $ price price Oligopoly 3. Price leadership Behaviour of firms leaders price changes smaller firms

6. Firms often engage in __________________ . Example Lucky draws organised by supermarkets. Oligopoly 4. Non-price competition Behaviour of firms non-price competition

7. A large number of _____ and ______ ____________ goods Perfect / Imperfect information of the market ____ entry and exit Monopolistic Competition Monopolistic competition is a market structure with the features of both ________________ and _________. perfect competition monopoly Features similar to perfect competition Features similar to monopoly sellers Heterogeneous buyers Free

8. Monopolistic competitors are price ________. _________ competition Monopolistic Competition Behaviour of firms searchers As the firms sell differentiated products, they can influence the __________ of the good. They have to find the price which maximises their ______. market price profits Non-price

9. Hutchison Global Crossing PCCW New World Telephone New T&T Quiz One Identify the market structure of the International Direct Dialing (IDD) services in Hong Kong. Oligopoly The market is dominated by several major seller like:

10. Quiz Two Suppose the costs of providing IDD services are lower due to technological progress. If PCCW lowers its price, what will be the actions of other IDD service providers? Since the market structure of IDD services is an oligopoly, the decisions made by firms will be _______________. interdependent Other firms will _____ their prices when PCCW lowers its prices. lower

11. ______ number of groceries in Hong Kong entry into the market is _____ as only a small amount of capital is required goods sold in different groceries are regarded as ______________ by consumers __________ information of the market Quiz Three What is the market structure of newspaper stalls in Hong Kong? Explain. It is _______________________ as the features of both ___________________ and _________ are present: monopolistic competition perfect competition monopoly large easy heterogeneous imperfect

12. End