Question

Please, i need Unique answer, Use your own words (don't copy and paste). Please, don't use handwriting, Use your keyboard.

Q. 3. When the whole sector of the market is occupied by the little number of big corporations who share the leadership, what do we call this type of market structure? Explain in details the benefits for the leading company and disadvantage of such situation on final consumers.

Answer 1

Answer : We call this market as an Oligopoly market structure where there are few sellers dominate the market in order to earn maximum share of market and profit .

Benefit for leading company are :

• Helpful in creating power in the market in order to grab maximum share in the market.
• Extra profit earned in Oligopoly market goes directly for research and development purpose.
• Higher price has been charged by Oligopoly and earned Advantage of Economics of scale.
• Helpful in creating position in the market.
• Earned huge profit and refinement of new product in the market structure.
• Reduced competition in the market structure
• Barriers to entry are quite high.

Disadvantage of Oligopoly market for Consumer:

• Higher price for the product has been given by consumer as there are limited choice available with them.
• Limited information about the product available with the customer.
• Best quality product is not available with them.
• Need of customer should not best and Efficient satisfied in systematic manner .
• Resources should properly utilised in systematic manner.