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Market — Economics STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsMarket3 Marks
Question
Clarify the meaning of Oligopoly.
✓

Answer

  • Oligopoly is such a system in which the sellers are very few.
  • This means that there are two or more sellers but not innumerable.
  • It is usually believed that the number of sellers is between to ten or twenty.
  • The entire supply of the industry is distributed among few firm.
  • In English, the oligopoly is made of two roots - 'oligo' and pollien.
  • Oligo means few and pollien means to sell In short, oligopoly means the monopoly of the few sellers or producers.
  • Oligopoly means, when the total supply of industry is in the hands of the few firms, each firm becomes a monopolistic and these firm, can be called oligopoly.
  • " According to Prof. Mayers :
    • "Oligopoly is such a condition in which there is a small number of sellers and so each seller individually places the supply in the market and he is conscious about its effect on the price."
  • It is a market in which there are very few sellers or producers who either produce or sell homogeneous or near substitutes and each firm has substitution supply in the industry.
  • In this market, intense competition between firms.
  • In this market due to less number of firm element of monopoly is enter.
  • Because of number of buyers are unlimited.
  • There is more interdependence of the firms.
  • Producers or sellers has to consider the quality or price of competition while deciding the price or quality of their goods.
  • Because of interdependence, the elements of competition is enter.
  • There is also price rigidity seen in this market.
  • Because of this competition, firm follow the price reduction of a firm and never follow the price rise.
  • In this market, kinky demand curve of the firm is seen.

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