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Author: Admin | 2025-04-28
Current inventory as well to increase the overall value proposition that consumers experience in each situation.List of the Disadvantages of an Oligopoly1. Higher concentration levels reduce consumer choice. When there are only a handful of organizations that are active in a specific industry, then the higher concentration levels in society can reduce the amount of choice that consumers receive. Imagine that you’re in the market right now to purchase a commercial aircraft to start building a new fleet. There are only two global airliner manufacturers left: Boeing and Airbus.“Now that Bombardier is out of the segment, the CSeries clearly has only a niche future as part of the Airbus line,” writes Michael Boyd for Forbes. “That puts finis to the last potential and truly threatening competitor to Airbus and Boeing.”2. Collusion is possible in this structure to further reduce competition. There are three specific types of collusion that are possible with an oligopoly: overt, covert, and tacit. The first occurs when there is no attempt made to hide an agreement. One could argue that OPEC is a form of this option. Covert ones occur when the companies involved attempt to hide the results of their “partnership,” often done to avoid the detection of regulators for some reason. Price fixing is a common example of this second form.The third option is tacit collusion and it arises when organizations work together even though a formal or informal agreement is not in place. This issue can be difficult (or impossible) to prove, but
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