Question

Oligopolies are prevalent throughout the world and appear to rapidly increasing. Unlike a monopoly, where one corporation dominates a certain market, an oligopoly consists of a select few companies that have significant influence over an industry. Choose one current example of an oligopoly in the market e.g., cable television, cellular phone service, computer operating systems, airline industry, auto industry, pharmaceuticals, etc. Each student must choose a different example (first come, first served!). With a minimum of two detailed paragraphs; Explain how this oligopoly works (companies involved, competition/cooperation) Explain the effects on consumers, both positive and negative.

Answer 1

The business related computer operating system is like an oligopoly system which consists of a limited number of organizations who actually compete between themselves in the market to overcome each other. If we look at this industry, we will observe that there is Microsoft and then there is Apple who are the big players in the industry and the industry is limited to a certain competition where most of them have very less amount of contribution. I believe when the quantity of competition is less then the quality will be high because customers have less options and they will try to get the better out of the options and hence the competition between these players increase because there is always tendency to go up than the other which will give the organization a competitive advantage.

In this case we understand that Microsoft believes in quantity and targets the mass whereas Apple initially targeted a section but now aims at attracting the mass and this has made the competition quite fierce because as the target is almost same each have to be better in order to be successful. The positive is that the customers get a better deal but the disadvantage is that as the competition is small they may practice almost a monopoly between them because customers generally do not have any other option except these two.