Question

Describe an oligopolist market of your choosing. What potential non-legislative changes might take place in that market which would convert it to a monopolistic competitive market? If replying to someone else's scenario, what changes might convert the oligopoly structure to more of a monopolistic-competitive structure?

Describe three or more scenarios where a company would increase the quantity of labor resource (number of workers) it hires.

Answer 1

An oligopolist market such as television makers Sony, Samsung might move from oligopolist market to monopolistic competition wherein more firms turn up.

There could be limited barriers to entry wherein consumers brand loyalty differs and they start to prefer other companies products because of an attractive brand ambassador or higher brand marketing.

Average costs of raw materials for manufacturing TV might decline which is why new firms come up in the market.

And there might be low geographical barriers in terms of more foreign investment which leads to more foreign companies selling products locally.

A company would increase the quantity of labor resource when

(i) There is a hike in demand and company needs to generate more output.

(ii) It could also be that wages have declined or are not increasing at the same pace as profits, which could lead to the company hiring more workers.

(iii) When costs of production decline such as input prices of oil needed for manufacturing the final product, then the company might hire new labor force.