Question

In: Economics

companies in an oligopoly produce differentiated products. what is one of the products produced by the...

companies in an oligopoly produce differentiated products. what is one of the products produced by the Netflix ?what as its current price?

Solutions

Expert Solution

An oligopoly is a form of market in which the market or industry is dominated by a small group of large traders. Oligopolies can occur due to a variety forms of collusion that reduce competition in the market, which then tend to lead to higher prices for consumers.

Differentiation strategy is not essential for the growth of an oligopoly, but if a company is able to effectively differentiate the product, it can gain market power more easily and dominate at least part of the industry. Each supplier keeps trying to make their products slightly different in order to charge higher prices to customers. Examples of distinct oligopolies include industries like car, beer, tobacco, entertainment etc.

Netflix:

Industry Entertainment and media broadcast industry
Product Streaming media, video on demand

Netflix is an American streaming service which comes under entertainment and media broadcast industry is tremendously popular. Netflix is an immensely popular subscription service that allows you to watch large catalog of movies and television shows.

The structure of market under which Netflix operates is an oligopoly. There are a few companies in an oligopoly which dominate the whole market. Netflix, Hulu and Amazon Are the major rivals in the streaming industry.

Current Price:

Plan Price/Month ($) Number of Device Video Quality
Basic Plan 8.99 One SD
Standerd Plan 12.99 Two HD
Premium Plan 15.99 Four Ulta HD

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