Question

define the concepts of monopoly and oligopoly and discuss the extent to which large corporations are no longer engaged in competitive economic activities

Answer 1

When a single firm produces goods having no close substitute, with significant barriers to entry of other firms it is termed as a monopoly market. When there are a small number of relatively large firms that producing similar but slightly different products having significant barriers to entry for other enterprises; it is called oligopoly market. In a monopoly, the prices for the goods is very high; because there is no competition. In an oligopoly, due to the presence of competition the prices are moderate. A diversified company has two levels of strategy: business unit (or competitive) strategy and corporate (or companywide) strategy. Competitive strategy is all about creating competitive advantage in the businesses a company competes. Corporate strategy concerns two different questions: the corporation should be in which businesses and the array of business units corporate office that should managed (Michael, 1987).

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