Analysis Of The Oligopoly Form Of Market Economics Essay

Analysis Of The Oligopoly Form Of Market Economics Essay An oligopoly is a form of a market, in which any particular industry is dominated by few sellers which are also known as oligopolists. Originally this word is derived from Greek, which means few to sell. Now since there is small number of smaller involved in a particular industry, this makes them very much conscious of the other players of the same industry. Rather, to be more precise any decision of Firm one influence and are influenced by, the decision of other firms. Lot of business scrutiny techniques are used in strategic planning such as SWOT, PEST, STEER and EPISTEL analysis needs to take into report the likely responses of the other players. Description Oligopoly is a common form of market. Often the four-firm is used to describe vice nary of oligopoly, in which the most common ratios are CR4 and the CR8, which means the four and the eight largest firms in a particular industry and also measures the share of the four or the eight largest organizations in an industry as a percentage. Now let me use an example to make the above point clear. Here we will take the US cellular phone market. In 2008, the companies like ATT, Sprint, Verizon and T-Mobile together controlled over 90% of the market. Despite of the common market share and oligopolistic competition can give rise to a wide range of results. In a circumstances where a firm may develop a practice which could be a trade preventive, such as collusion, market sharing etc. to raise there product price while restrict the production which is similar to the monopoly, this could be short term as well as long term. Let us see and understand monopoly in equilibrium. The illustration of monopoly is considered to be the same in short run and long run. Now the revenue maximization occurs where MR=MC. And therefore equilibrium is at P and Q. Features of this diagram are that there are barriers to entry in Monopoly. Companies are price maker. Profits are maximized at output where MR=MC. This means they set a price greater than MC which is inefficient. In this diagram the companies makes supernormal profits because AR is greater than AC. In order to get this in effect, a official agreement takes place which is also known as cartel. The best example of cartel is OPEC which has a deep influence on worldwide price of oil. These kinds of participant are Price Setter and not the Price Taker. Through the process of collusion, oligologics can reduce the risks in markets for investment and product development and is an attempt to steady the unbalanced market. In most countries this is legally restricted. In other situations, competition can be fiercer between sellers in an oligopoly, with relatively low prices and high production. This could lead to proficient results. The results can be better when there are more companies in an industry. Characteristics The major characteristics of oligopoly are to maximize the profit by producing, where in the generated marginal revenue equals to the marginal costs. Position to set the price, which we have previously discussed above that oligopolies are price setters rather than price takers. Barriers for new firms to enter are higher. We can split these barriers in two groups, one of which is natural and the other is strategic entry barriers. These barriers are based on economical scale, patents, way in to expensive and difficult technology and above all the tactical actions by present firms designed to put off or tear down emerging firms. Since, there are few companies which results the actions of one firm can weight the actions of the other firms. Predominate factor is high barriers of the entry which prevents emerging companies from entering market, which in result can retain long run atypical profits. The most typical feature of an oligopoly is interdependence. Since oligopolies consists of fe w large firms and, each firm is so large that any of its action can affect the market condition. And due to this reason, the competing firms are well conscious of the market actions and are set ready to respond accordingly and correctly. In order to view a market action, a firm must take into the deliberation the possible reactions of all rival firms and there moves. A game of chess is a best example to simplify the above statements. Wherein both the opponents are very well conscious of each others action and are ready for the counter moves, this is duopoly. But this could explain the oligopoly since the players in the market are few in numbers. Modeling There is no model to explain the process of an oligopolistic market. In some markets there is a solitary firm which wheels a leading share of the market and a group of smaller firms. The dominant firm sets prices which are simply taken by the smaller firms in shaping their profit maximizing level of production. This type of market is known as a monopoly. Cournot-Nash model The Cournot-Nash model is the simplest oligopoly model. In this model there are two likewise positioned firms, the firms competes on the basis of the capacity rather than price and each firm makes and production decision assuming that the other firms actions is fixed. Now the bend of the demand in the market is based on assumptions to be linear and marginal cost are constant. To find the Cournot-Nash equation, one needs to determine how each firm reacts to a change in the output of the other firm which is followed by sequence of proceedings and reactions. This outline continues until a point is reached where neither firm desires to change what it is doing, given how it believes the other firm will react to any change. The balance is the intersection of the two firms reaction functions. The reaction purpose shows how one firm reacts to the mass choice of the other firm. For an example, assuming that the Firm A demand function P = (60 Q2) Q1 where Q2 is the quantity produced by the o ther firm and Q1 is the sum produced by firm A. Assume that the marginal cost is 12 Firm A wants to know its maximizing quantity and price. Firm A begins the process by following maximization rule of equating marginal revenue to marginal costs. Firm As total revenue purpose is PQ = Q1(60 Q2 Q1) = 60Q1- Q1Q2 Q12. The marginal purpose is MR = 60 Q2 2Q. MR = MC 60 Q2 2Q = 12 2Q = 48 Q2 Q1 = 24 0.5Q2 (1.1) Q2 = 24 0.5Q1 (1.2) Equation 1.1 is the reaction function for firm A. Equation 1.2 is the reaction function for firm B. The balance quantities can also be determined graphically, in which the balance explanation would be at the intersection of the two reaction functions. In mechanized economics, barriers to entry have resulted in oligopolies forming in many sectors, with new levels of struggle fueled by rising globalization. These are typically determined by development of a product and advertising. For example, there is only undersized figure of producers of civil passenger aircraft. Oligopolies have also arisen in a lot regulated markets such as wireless communications, in several areas only two or three providers are licensed to operate. In United Kingdom, there are five banks that control the UK banking sector, and were also accused of being an oligopoly by the newcomer Virgin bank. Going to the grocery market, we find four companies who shares 74.4% to 75.01% of the grocery market which are Tesco, Sainsburys, Asda and Morrisons. The detergent market is dominated by only two players and they are Unilever and Procter Gamble. Demand Curve In oligopoly, any company operates under flawed competition. With the vicious price competitiveness created by demand bend, firms use non-price competition in order to boost revenue and market share. Kinked insist curves are similar to usual insist curves. They are different by a hypothesized bowed bend with a discontinuity at the bend-Kink. Hence, the first imitative at that point is not clear and leads to a hop discontinuity in the marginal revenue curve. The inspiration following this kink is the thought that if firms will not elevate their prices because even a small price raise will drop many customer in oligopolistic or monopolistically competitive market. The reason behind this is that, the competitors will generally pay no attention to the increase in prices and will focus on gaining a larger market share. However, even a large price reduction will gain only a few customers because such an action will begin a price war with other players in the market. And for this reason, the curve is therefore more price-elastic for price add to and less so for price decreases. Firms will often enter the industry in the long run.

The Argentine Economic Crisis 1999-2002 Essay -- Essays Papers

The Argentine Economic Crisis 1999-2002 Basic Information About Argentina Argentina is a nation located on the East coast of the sothern-most tip of South America. It occupies an area of 2,766,890 square kilometers, which is approximately equal to about three-tenths the size of the United States. It has a population of nearly 40 million people with a growth rate of 1.13%. The populace is 97% Caucasian (primarily of Italian and Spanish decent) with various indigenous groups comprising the remaining 3%. Over 90% of the population is Catholic. The primary language of the nation is Spanish. The national literacy rate is around 96% (CIA). Argentina has been a democracy since 1983, before 1983 it suffered from a tumultuous period during which it fluctuated between democratic and authoritarian rule. It is currently a constitutional republic with mandatory suffrage of all citizens over 18 years of age. The current president is Eduardo Alberto Duhalde, who has held power since he was appointed to the position of presidency on the second of January 2002 (CIA). The Argentinian economy enjoys a well diversified industrial sector along with a well developed export-oriented agricultural sector . Argentina also benefits from extensive natural resources and a well educated populace. Major industries in Argentina include food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel. Argentina boasts a GDP of $453 billion (2001) with about 6% devoted to agriculture, 28% devoted to industry and 66% devoted to services. Its primary export partners are Brazil (25.1% of all exports), the United States (18.7%), Germany (5%), and China (4.6%). In spi... ... Norden, Deborah L. and Roberto Russel. The United States and Argentina. New York: Routledge, 2002. Mussa, Michael. â€Å"Argentina and the Fund: From Triumph to Tragedy.† Policy Analysis in International Economics 67 (2002) The Argentine Crisis: Chronology of Events After Sovereign Default Since April 7 June 2002. Standard and Poors. March 12, 2003 The Argentine Financial Crisis: A Chronology of Events January 31, 2002 CRS Report for Congress. March 3, 2003 < http://fpc.state.gov/documents/organization/8040.pdf> United States Congress, House of Representatives. Subcommittee International Monetary Policy and Trade. Hearing on the State of Argentine Economic Crisis and the Role of the International Monetary Fund. 5 March 2002 The Argentine Economic Crisis 1999-2002 Essay -- Essays Papers The Argentine Economic Crisis 1999-2002 Basic Information About Argentina Argentina is a nation located on the East coast of the sothern-most tip of South America. It occupies an area of 2,766,890 square kilometers, which is approximately equal to about three-tenths the size of the United States. It has a population of nearly 40 million people with a growth rate of 1.13%. The populace is 97% Caucasian (primarily of Italian and Spanish decent) with various indigenous groups comprising the remaining 3%. Over 90% of the population is Catholic. The primary language of the nation is Spanish. The national literacy rate is around 96% (CIA). Argentina has been a democracy since 1983, before 1983 it suffered from a tumultuous period during which it fluctuated between democratic and authoritarian rule. It is currently a constitutional republic with mandatory suffrage of all citizens over 18 years of age. The current president is Eduardo Alberto Duhalde, who has held power since he was appointed to the position of presidency on the second of January 2002 (CIA). The Argentinian economy enjoys a well diversified industrial sector along with a well developed export-oriented agricultural sector . Argentina also benefits from extensive natural resources and a well educated populace. Major industries in Argentina include food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel. Argentina boasts a GDP of $453 billion (2001) with about 6% devoted to agriculture, 28% devoted to industry and 66% devoted to services. Its primary export partners are Brazil (25.1% of all exports), the United States (18.7%), Germany (5%), and China (4.6%). In spi... ... Norden, Deborah L. and Roberto Russel. The United States and Argentina. New York: Routledge, 2002. Mussa, Michael. â€Å"Argentina and the Fund: From Triumph to Tragedy.† Policy Analysis in International Economics 67 (2002) The Argentine Crisis: Chronology of Events After Sovereign Default Since April 7 June 2002. Standard and Poors. March 12, 2003 The Argentine Financial Crisis: A Chronology of Events January 31, 2002 CRS Report for Congress. March 3, 2003 < http://fpc.state.gov/documents/organization/8040.pdf> United States Congress, House of Representatives. Subcommittee International Monetary Policy and Trade. Hearing on the State of Argentine Economic Crisis and the Role of the International Monetary Fund. 5 March 2002

Brief History of Computer Essay

?First programmable computer: The Z1 originally created by Germany’s Konrad Zuse in his parents living room in 1936 to 1938 is considered to be the first electrical binary programmable computer. The first digital computer: Short for Atanasoff-Berry Computer, the ABC started being developed by Professor John Vincent Atanasoff and graduate student Cliff Berry in 1937 and continued to be developed until 1942 at the Iowa State College (now Iowa State University). On October 19, 1973, US Federal Judge Earl R. Larson signed his decision that the ENIAC patent by Eckert and Mauchly was invalid and named Atanasoff the inventor of the electronic digital computer. The ENIAC was invented by J. Presper Eckert and John Mauchly at the University of Pennsylvania and began construction in 1943 and was not completed until 1946. It occupied about 1,800 square feet and used about 18,000 vacuum tubes, weighing almost 50 tons. Although the Judge ruled that the ABC computer was the first digital computer many still consider the ENIAC to be the first digital computer. Because of the Judge ruling and because the case was never appealed like most we consider the ABC to be the first digital computer. However, because the ABC was never fully functional we consider the first functional digital computer to be the ENIAC. The first stored program computer: The early British computer known as the EDSAC is considered to be the first stored program electronic computer. The computer performed its first calculation on May 6, 1949 and was the computer that ran the first graphical computer game. The first personal computer: In 1975 Ed Roberts coined the term personal computer when he introduced the Altair 8800. Although the first personal computer is considered to be the Kenback-1, which was first introduced for $750 in 1971. The computer relied on a series of switches for inputting data and output data by turning on and off a series of lights. The Micral is considered to be the first commercial non-assembly computer. The computer used the Intel 8008 processor and sold for $1,750 in 1973. The first workstation: Although never sold the first workstation is considered to be the Xerox Alto, introduced in 1974. The computer was revolutionary for its time and included a fully functional computer, display, and mouse. The computer operated like many computers today utilizing windows, menus and icons as an interface to its operating system. The first laptop or portable computer: The first portable computer or laptop is considered to be the Osborne I, a portable computer developed by Adam Osborne that weighed 24 pounds, a 5-inch display, 64 KB of memory, two 5 1/4†³ floppy drives, and a modem.

Joseph Stalin And His Quest For Power - 975 Words

Samantha DeMichele Joseph Stalin and His Quest for Power Joseph Stalin, who later adopted the name â€Å"Stalin†, meaning â€Å"man of steel†, was born in the poor village of Gori, Georgia on December 21, 1879 It was in his youth that Stalin realised just how he wanted the Soviet Union to be ruled and that he himself must take action to help this. His harsh upbringing and paranoia sparked his strong and violent temper. He wanted power and he wanted to be in control. His supremacy acted as a drug in his system and he was continually hungry for more. He created an idealized self image that required him to seek not only political power, but also recognition of himself as a great intellectual and social leader. This can be seen very clearly in the purges that he ordered. Stalin really never knew any other life than the constant chaos and violence that surrounded him. Much of Stalin s violent temper stems from his childhood where violence and poverty were dominate. The root of Stalin s inexh austible cynicism is sought to be here.. in his formative years where all parts of society seemed to treat him cruelly so he turned his back on society and became anti social.† In his early years, Stalin suffered from beatings by both of his parents for no apparent reason. At age 7 he contracted smallpox, which left his face scarred and his arm slightly deformed. Because he looked so different, other children called him names and treated him cruelly. This is what instilled his inferiority.Show MoreRelatedAdolf Hitler and Joseph Stalin1033 Words   |  5 PagesAdolf Hitler and Joseph Stalin are two of the most sadistic dictators of the past century. They both reigned terror in Europe during World War II. Fueled by rage and anger, Hitler and Stalin rose to power and exploited their beliefs throughout Germany and Russia. Stalin turned Russia into a Communist country while Hitler was turning Germany against Jews. 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