A few large producers
Homogeneous or differentiated products
Limited control over price
Entry Barriers in Oligopoly:
The entry barriers in oligopoly are not as great as in monopoly
o The ability of a seller to raise price without losing all demand for the product being sold
o A firm with market power that selects its price, rather than accepting the market price as a
o market demand curve
All firms pay into the government Unemployment Insurance fund, which provides
basic subsistence wages to unemployed individuals
To qualify for unemployment, an individual must have worked a minimum amount of
time and be willing to accept a new su
Paying at Market Rate
Benefits and costs of paying below-market rate?
Good for industries with high unemployment
Reduces direct labor costs
Good if there are non-work-related reasons
Lower morale and satisfaction (cost)
Higher turnover among high performe
Oligopoly Market Structure
o You can see oligopoly market structure can have different characteristic, but in all cases,
a small number of strategically interdependent firms produce the dominant share of output in
Economies of scale
Oligopolists have substantial financial resources with which to support advertising.
o Can be manipulative
o Contains misleading claims that confuse consumers
o Consumers pay high prices for a good while forgoing a better, lower priced
Another bonus is consumer surplus and producer surplus are maximized in the long run in pure
competition. Note: P=min ATC=MC does not occur in decreasing cost industries.
A market structure in which a single firm serves an entire market
Issues with external equity can lead to:
In determining external equity, firms rely mainly on pay surveys conducted by external entities
Society for Human Resource Management
Will production result in economic profit?
Yes, if price exceeds average total cost (TR will exceed TC). No, if
average total cost exceeds price (TC will exceed TR).
We must work through these 3 questions sequentially every time we are confronted with
MGB 11:00 a.m. 11:50 a.m
Mini Case Study
Due April 24 at 11:00 a.m. via e-mail
Case Study Questions
1. Provide a detailed summary of the conflict process that unfolded in the cosmetics department.
Your summary should