Collusive Oligopoly

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Collusive Oligopoly ‘Cartel’s are a kind of ‘collusive’ oligopoly. OPEC’ Organisation of Petroleum Export countries is one of the example uf collusive oligopoly, In this type uf oligopoly, a group is formed under ali agreement, where they decide regarding price of the product output and area of distribution and marketing. Collusive oligopoly is a kind of market in which the whole […]

PRICE LEADERSHIP UNDER OLIGOPOLY

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PRICE LEADERSHIP UNDER OLIGOPOLY In an oligopolistic situation. there arc more than two or a few sellers who arc able to exercise monopolistic influence. III such a market situation. we generally find that there exists what is called the ‘price leadership’. Under price leadership. one finn a surnes the role of a price leader and fixes the price of the product for […]

DUOPOLY

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DUOPOLY Duopoly may be of two types: (a) Duopoly without product differentiation and (b) Duopoly with product dillcrcntiation. Duopoly Without Product Differentiation Under duopoly the simplest cases will be those where the two monopolists arc supposed to be selling an identical commodity and there is no product differentiation. Very likely there will be a collusion between  the two. They may […]

Effects of Monopolistic Competition

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Effects of Monopolistic Competition  Based Oil the above analysis may sum up the effects of monopolistic competition a~ under. Ii) Unlike pure competition. under monopolistic competition, output is  the pi iccs slightly higher. Iii) Under mouopohstic c01l1pclilil1n. the consumers have the pleasure of enjoying the use of wider  in types. design and quality. tiii) The  engage ill high pll salesmanship, the expenditure […]

Increased Selling Costs vs, Price-Cutting

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Increased Selling Costs vs, Price-Cutting We have mentioned before that apart from improving quality. there are two methods of increasing the sale or output. rh .. reducing the price or increasing selling costs ii.e .. spending more money on advertising and salesmanship) two nltc matics, which is better’} t IS obvious that. froll’ the point’ view of the buying public. price […]

Wastes of MONOPOLY Competition

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Wastes of MONOPOLY Competition Another similar waste is “expenditure” on  in north 01 India may he selling . the consumers in the south. At the same rime. the same (or substantially the same) commodity is perhaps being sold by a firm located in the south to consumers living in the north. This state of affairs is also due to the absence of perfect […]

EXCESS CAPACITY UNDER IMPERFECT COMPETITION

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EXCESS CAPACITY UNDER IMPERFECT COMPETITION  `Discussion of monopolistic competition by Chamberlin and Joan Robinson have shown that firms under imperfect competition operate with excess capacity. Acc~ing to these economists. a finn under monopolistic competition or imperfect competition produces on output in the long-run equilibrium. which is less than socially optimum or ideal output. In other words, they do I0t Produce that level […]

Optimum Selling Costs?

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Optimum Selling Costs? The question arises: how much advertising expenditure will the firm find it worthwhile to incur? Obviously. by spending a certain amount on advertising a producer gets a certain revenue. A firm will incur extra expenditure on advertising when it finds it worthwhile. i.e when it brings additional revenue. So long as the marginal revenue exceeds the marginal cost on […]

SelLING COSTS

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SelLING COSTS Meaning of Selling Costs The costs incurred on advertising, publicity and salesmanship arc known a~ selling costs, Selling costs have been defined “as the costs necessary to persuade a buyer to buy one product rather than another or to buy from one seller rather than another.” Obviously, if the markets were perfect, i.e., if the buyers were well informed about […]