Oligopoly Problem - All such causes create market...

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Oligopoly Problem: Monopoly and Competition are two extreme forms of market under traditional analysis. Between these two forms there are other possibilities such as Oligopoly and Duopoly. When there are only a few producers or sellers the market is said to be an oligopoly. With one or more requirements of perfect competition missing or weak the market assumes a certain degree of imperfection. The number of firms may not be sufficiently large or the freedom of entry may not be fully available or knowledge about the market conditions may be inadequate or the factors of production may not be fully mobile.
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Unformatted text preview: All such causes create market imperfections. Oligopoly and Duopoly are the result of a small number of producers. This is Quantitative Imperfection . Economic theory finds it difficult to find a solution to oligopoly or duopoly markets. This is because of the fact that with the presence of a few producers there is bound to be stiff rivalry among producers. This may cause endless price-cutting tendencies. As a result of this stable equilibrium solution may not be possible. Such a suspicion is unfounded since in reality oligopolists and duopolists do exist and perform successfully....
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Oligopoly Problem - All such causes create market...

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