Monopoly and Oligopoly market structures Which do you think

Solution

A monopoly is a structure in which a single supplier produces and sells a given product. a monopolist has the ability to charge a price that is higher than the perfectly competitive market. This results in the price charged to the consumer being higher than usual. Also the consumer will not have the chance to choose from a variety of options as the monopolists usually deter new entrants. An oligopoly, on the other hand, is a market structure that is organized such that there are few sellers in the market where each sells a differentiated product. Each firm\'s pricing strategy depends heavily on other firms . for example if a firm wants o to reduce prices to capture a larger portion of the market share it will fail to do so s all other other firms will also follow, and if it increases its prices no one will follow. A consumer will pay a higher price in an oligopoly as compared to a competitive equilibrium but lower than that charger by a monopoly. The consumer will also enjoy a variety of the commodity as the oligopolistic market is characterized by differentiated goods. All folklore examples of natural monopolies are actually the result of governments working with one big business to control the industry usually for nefarious reasons. Rail, telephone, water, electric, gas, etc. If infrastructure costs are high for these, then consumer demand and the resulting market prices will drive their development.

an example of an oligopoly is OPEC that controls a large portion of the words oi supply an have the ability to control the world prices and often collude and regulate price. An oligopolistic market with differentiated product is the market for biscuits or chocolates etc