ECON Video #7

ECON Video #7 - Michael Blasius 11/01/07 Video #7...

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Michael Blasius 11/01/07 Video #7 Oligopolies: What Happened to Price Competition? Henry Ford made automobiles available to many people while at the same time paying the highest wages in the industry and also improving the Model T year after year. Chevrolet, another automobile producer, was the main competitor of Ford with Chevrolet focusing on appearance and Ford on economy. By letting consumers choose the color of their car and also by using advertising which linked a car to a person’s status, Chevrolet was able to sell a similar product without having a lower price than Ford. Chevrolet’s product differentiation allowed the company to draw customers to their uniquely styled cars . By using product differentiation, Chevrolet was able to avoid price competition with Ford, a competition Chevrolet could not win against the low-priced Model T . In the oligopoly of the electrical industry, corporate executives conspired in order to keep their prices at profitable levels . The occurrence of identical bids
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ECON Video #7 - Michael Blasius 11/01/07 Video #7...

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