Economics and Financial Markets The Issues of Competition and Monopoly Associated With Oligopolistic Markets



In order to be able to understand about the issues of competition and monopoly, especially in association with oligopolistic markets and using the example of airlines, in particular, there are many different matters that need to be discussed. By using particular literature, especially that which discusses the most relevant factors, such as markets, supply and demand, wages, market failure and government supply, aggregate demand and supply, macroeconomic issues, national income, fiscal and monetary policy, unemployment, inflation, international trade, and balance of payments, for instance, then we will be able to come to a much more knowledgeable and understanding viewpoint on this subject matter as a whole. There are in fact various different characteristics that are considered as being major in regards to oligopolistic markets, and each and every one of these characteristics are just as important as the next, however each also must be discussed in regards to its differences as well as similarities to the others. basically the main characteristics of oligopoly are: the market is for the most part dominated by only a few certain and particular companies which are all relatively large. the production of identical products which are similar. there are significant barriers to entry. the basic interdependence of production decisions within the market. In other words and to be more specific, an oligopolistic market basically exists when there is a small number of firms which dominate the supply to an entire market. The specific degree of market concentration is very high here, and "Firms within an oligopoly produce branded products (advertising and marketing is an important feature of competition within such markets) and there are also barriers to entry." (Tutor, 2007). Another severely major characteristic in regards to oligopolistic markets is the fact of how there is interdependence between firms. basically, this means that each separate firm must take into account for themselves the facts and the likely reactions of the other firms, and this is especially true when they are making pricing and investment decisions. Although the oligopolistic markets are considered as being incredibly beneficial and positive in many ways, there are also certain downfalls.&nbsp.

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