Review the following (Economics)

timer Asked: Feb 6th, 2019
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Question Description

400 – 600 words for each questions

Tutor Answer

School: Carnegie Mellon University

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Running head: ECONOMICS




Question one

An oligopoly is a market that is dominated by small number of large sellers. This is
caused by collusion that is intended to reduce competition translating to increased consumer
prices for various products offered in the industry. An airline industry (comprising of various
players such as Jetblue, Spirit and the American) is an example of an oligopoly market since
there are few players though large companies offering services across the globe (Heimlich,
2017). There is stiff market competition due to the fact that consumers do have multiple choices
to make on the type of airline services offered to them. There are always efforts made to ensure
that improved customer satisfaction is attained. In the United States of America, prices (fares)
have reduced at the same time service delivery improved by a huge margin (Heimlich, 2017).
Therefore, it is important to appreciate the fact that oligopoly markets tend to be inflexible and
success is determined by nature of market competition cased by numerous players in the
industry. Each and every firm has its own price and the product output policy and this is based
on the actual judgment made by one of the competitors. Therefore, the price is determined on the
basis of linear limit of competitive price. There is product standardization and differentiation as
one of the necessary strategies of ensuring that stiff market competition is addressed in the best
way possible.
Monopolistic market is where one firm operates at a marginal cost as compared to its
competitors (Kramer, 2018). The best type of monopolistic market is one comprising of
electricity providers. Providers of electricity do have exclusive rights to offer services to the
municipalities as granted permission by the local governments. In this case, price and non-price
strategies are based on a number of metrics. For example the goal of providers of electricity is to
come up with the necessary strategy to maximize on profit generation and sometimes this is at



the expense of the consumer. This price is determined by the demand of electricity and any other...

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