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Essay: Discuss how firms in Oligopoly are likely to
compete with each other
Oligopoly is a market structure in which a few firm dominate the industry, it is an
industry with a 5 firm concentration ratio of greater than 50%.

In Oligopoly, firms are interdependent; this means their decisions (price…

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If prices are rigid and firms have little incentive to change prices they will concentrate
on non price competition. This occurs when firms seek to increase revenue and sales
by various methods other than price.

For example, a firm could spend money on advertising to raise the profile of their…

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6. Effective punishment strategy's for firms who cheat
7. No effective govt legislation, collusion is illegal in the UK

Conclusion:

There is no certainty in how firms will compete in Oligopoly; it depends upon the
objectives of the firms, the contestability of the market and the nature of the product.

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