Question

In this assignment, you are going to find some examples of oligopoly.

Oligopoly refers to an industry which is dominated by just a few companies. An example of oligopoly is the industry of cell phone operating system, which is dominated by Android and IOS.

In this assignment, find three examples of oligopoly, and briefly discuss the reasons why oligopoly arises in those industries.

Answer 1

There are many industries that are ruled by oligopoly . Some of the most common are the health care industry , the media industry and the cellular phone service industry . The suppliers are generally very large so, in order to keep competition , prices have to be maintained under control .

There are some reasons why oligopoly arises in those industries . They are as follows :

(1) High profits : Since there us little competition , the companies that are involved in the market have the potential to bring a large amount of profits. The services and goods that are controlled through oligopoly are generally highly needed or wanted by the majority of population .

(2): Simple Choices : Having only a few companies that offer the goods or services that you are looking for makes it easy to compare between them and choose the best option for you.

(3) Competitive Prices : Being able to easily compare prices, forces these companies to keep their prices in competition with the other companies involved in the market . This is a great benefit for the consumers because prices continually go lower as other companies lower their prices.