Continuously cutting prices down they instead compete

Info icon This preview shows pages 3–4. Sign up to view the full content.

continuously cutting prices down. They instead compete by creating a brand, providing customer service, discounts and coupons and product differentiation . ” (Agarwal, 2017). Oftentimes, the bigger firms would lower their prices so much that their smaller competitors will drop out and then the prices are raised again. This creates the reason for collaborating with each other being illegal. Since the firms do keep close tabs on each other’s pricing and output, this helps them to reap in the profits since they are its own brand and consumers have preferences by being strategic with the decisions. Firms can become the price maker if they have a big enough market with an overabundance of revenues. They will always want the highest outcome to enjoy the benefits that many firms in perfect competition do not get to have. The number of oligopoly firms is surprisingly small considering how many brands there are out there along with choices and substitutes in each market. There are six firms that own 90% of the U.S. media. They are the following: CBS, NBC, Time Warner, Viacom, Walt Disney, and Rupert Murdoch’s News Corporation. In the auto industry, there are three firms that form an oligopoly; Chrysler, Ford, and GMC. For the music entertainment; BMG, EMI, Sony, Universal,
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern