Economics Oligopoly

Main economic features of an Oligopoly and key economic theories of price fixing. This part of the coursework aims to identify and explain the main economic features of an Oligopoly and also the key economic theories which influence the price of a product or service. This part deals with the theoretical aspects of Oligopoly and the later part emphasizes on the practical applications of the theories and oligopoly features.According to Pass et al (2000), â€Å"Oligopoly, a type of market structure is characterised by a few firms and many buyers, where the bulk of market supply is in the control of relatively few large firms who in turn sell to many small buyers†. To describe the degree of oligopoly, concentration ratio is often utilized. Concentration ratio is the measure of the market share of the largest four firms in the industry expressed as a percentage. A low concentration ratio suggests a high level of competition and vice versa for.As there are few players dominating the industry, each player or an oligopolist is said or likely to be aware of others course of actions. The decision taken by one player seems to affect the decision taken by others and strategic planning by the firms needs to take into account the likely response of other participants (Wikipedia, 2010). For example, a proper game of chess depends on how well you read your opponent’s moves, similarly in oligopoly; strategies are devised based on the moves of competing market firms.The reason for existence oligopoly as stated by Maunder et al (1991) is for the achievement of economies of scale. Firms tend to reduce their average cost of production by increasing their scale of operation and since the small firms have higher average costs, they tend to go out of business or be absorbed by the larger ones. The features of oligopoly are:- a. Number of Firms:-The very important feature of an oligopoly is the number of firms. Even though there are a large number of firms operating in a particular industry, only a handful of firms hold the major share between them. . Interdependence: – A very distinctive feature of an oligopoly is interdependence. When a very few large firms operate in a particular industry, their activities or strategy cannot be independent of each other. Unlike monopoly, where the monopolist need not worry about the reaction of its rivals as there are none, an oligopolist takes into consideration the possible reactions of all rival firms. For example, a company considering a price reduction of its products may wish to estimate the chances of price reduction by the rival company and hence starting a price war. . Profit Maximization Condition: – The firms in an oligopoly generally agree to co-operate and act as one monopolist as it generates high profits (Begg and Ward 2007). This kind of formal collusive agreement is called a cartel. An oligopoly maximises profits where the marginal revenue equals the marginal cost. This is also know n as profit maximization condition. Price ELASTIC UNIT ELASTIC P MC, AC PROFIT MAXIMIZING OUTPUT O MR Quantity (Source: Begg and Ward 2007) d.Perfect Knowledge: – Oligopolists are said to have a perfect knowledge about their cost and demand functions but a lesser information about other firms (Wikipedia, 2010). e. Entry Barrier: – One of the main important features of oligopoly also is the entry barrier. There are high entry barriers that restrain a new firm from entering a market. For example, the barriers can be the economies of scale, access to expensive and complex technology, lower costs for an established firm, brand loyalty, patented production process and strategic action by incumbent firms etc.The table below gives the market concentration in different industries. As discussed earlier, the large few firms form a cartel and set a price. Once the members of the cartel agree on the price, they compete against each other using non price competition in order to gai n the maximum revenue. There are other various ways in which the firms fix the price. One of them being tacit collusion, where the firms agree on a price set by an established leader. This is also known as dominant firm price leadership as the price setting firm is the dominant firm in the industry.The other way is the barometric firm price leadership, where the price leader is the one whose prices reflect the market conditions in the most stable form (Sloman et al, 2010). To fix prices, the producers must be able to control the market supply. The other forms of price fixing in tacit collusion is average cost pricing, where producers add a certain percentage of profit on top of average costs and price benchmarking, where firms raise the price only up to a benchmark already set.Price fixing is achieved by the competing firms coming together on a platform where they can agree on a common pricing and production strategy thus acting in a manner in which a monopoly operates. This kind of collusion is known as cartelisation. Cartels although banned in many countries, is difficult for the enforcement agencies to gather evidence and penalise the participants. The quantity for the cartel and the individual firm will not be the same as one firm individually will have the scope for further increase in productivity to achieve a situation where the marginal cost equals the marginal revenue.In such cases firms may decide to go ahead with excess supply which can lead to a price war and inconsistent revenues to the industry. Even without overt collusion firms in an oligopoly are able to reach a point of profit maximisation when they behave in a manner reflected in â€Å"Nash Equilibrium† (Begg and Ward 2007). 2B) Direct to Home (DTH) television industry in India acting as an oligopoly. India has a total television population of about 135 million of which about 108 million have an access to cable and satellite television (Plugged in, 2010).The total DTH sub base at the end of first quarter in the year 2010 was 23 million (Dish TV India Ltd, 2010) which was about just 1 million in the year 2006. Indian DTH industry has seen a flurry of activities in the recent years after a monopolistic reign by Dish TV for a couple of years. It is currently in a state of Oligopoly with the top four operators controlling nearly 80% of the total market. The major players in the market are Dish TV by Zee group, TataSky- a joint venture by Tata and Star TV, Big TV by Anil Dhirubhai Ambani Group, Digital TV by Bharati Telemedia and SUN Direct from Sun TV.Since there are only 3 major players in the DTH market, Indian DTH industry is an oligopoly. (Indiadth, 2010) The product offering by the rival firms are more or less similar in nature with little or no product differentiation. Amongst all the players, Sun Direct has essentially remained a regional operator who made a late debut in the national scene. The content or the channels are same with all the operators barring few omissions and additions. The DTH industry market share is as follows. BRAND| MARKET SHARE| Dish TV| 30%|TataSky| 22%| Sun Direct| 25%| Big Tv| 13%| Airtel| 8%| D2H| 2%| (Source: http://www. pluggd. in/dth-industry-in-india-analysis-297/) From the data above we can see that Dish TV, TataSky and Sun Direct together hold the maximum market share with over 75%. (Source: http://www. slideshare. net/) To confirm the oligopoly, we can use the Herfindahl-Hirschman index or the HHI. It measures the size of the firms in relation to the industry and also indicates the amount of competition between them. Mathematically, (Adapted from Pass et al, 2000)Here Si = market share of firm i in the market and N is the number of firms. Hence H = 302 + 222 + 252 + 132 + 82 + 22 H = 2246. With this value of H we can conclude that this industry is an oligopoly. Although there is no indication of an overt collusion in the industry, a closer look at their price plan (fig 1. 1) can lead us to a strategic o r tacit understanding between the players. The market is abuzz with marketing drives to garner market share and the customer is currently loaded with freebies like free installation, free channels and the like.Going by the level of investment and infrastructure the operators need to garner as much subscriber base as possible to be in a profitable proposition. They are however aware of the competition and are refraining from a price war. Such behaviour of the operators is characteristic of a non-price competition in Oligopoly. This is due to the interdependency of firms in the oligopoly and the strategic behaviour can also be referred to the â€Å"Nash Equilibrium† (Begg and Ward 2007). (Source: Slideshare. net/researchonIndia) Brand Name| PricePlan(inINR)/month| Dish TV| 135. 0| TataSky| 150. 00| Sun Direct| 115. 00| Videocon| 136. 00| Fig: 1. 1 (Source: Company websites, 2010) Now as in any oligopoly, it has to be supported by entry barriers, both endogenous and exogenous. T he natural barrier of entry in this particular industry is primarily associated with government licensing and also the intensity of capital investment required. Given that all the DTH operators are already established players in related sectors such as telecom, media it gives them a strategic advantage in terms of distribution and content.For any new entrant it could pose as a strategic entry barrier. Indian DTH market has constantly been attracting different players over the years given the increasing number of television subscribers. Although there have been entry barriers, companies like Videocon along with its cutting edge technology entered into the market in the presence of established players. The cutting edge technology proved to be a barrier breaker. Videocon managed to build television sets with set top boxes which helped it develop its own customer base.References Begg, D. , and Ward, D. (2007). Economics for Business, 2nd edition. Berkshire: McGraw Hill Publication. Chri stopher Pass, Bryan Lowes and Leslie Davies (2000). Economics, 3rd edition. HarperCollins Publishers. DTH, (2010). http://www. pluggd. in/dth-industry-in-india-analysis-297/ [Accessed 21/11/2010] Dish TV, (2010). http://www. dishtv. in/packages. aspx [Accessed 21/11/2010] Indiadth, (2010). http://www. indiadth. in/ [Accessed 22/11/2010] Maunder, P. , Myers, D. , Wall, N. , and Miller, R. L. 1991) Economics Explained, 2nd edition. Collins Educational. Sloman, J. , and Hinde, K. (2007). Economics for business, 4th edition. Essex: Pearson Education Limited. Sun Direct, (2010). http://www. sundirect. com/packages. php [Accessed 22/11/2010] Tata Sky, (2010). http://www. tatasky. com/channel-packages. html [Accessed 22/11/2010] Videocon, (2010). http://www. videocond2h. com/wsc/packages. html [Accessed 22/11/2010] Wikipedia, (2010). Oligopoly. http://en. wikipedia. org/wiki/Oligopoly [Accessed 21/11/2010)]

How Significant was the Vietnam War in Stimulating the Protest Culture of the 1960’s?

The popular protest culture that formed within the 1960's, that rebelled against the American traditional system arguably occurred because of the involvement in the Vietnam war from the federal government. Many young student and black Americans specifically, were highly against American intervention, prompting the protest culture.However, other reasons could have prompted this too, like the assassination of Kennedy, more political interest and involvement from young radicals now favouring communist and socialist ideas, and also, arguably the increase in education meaning young adults now didn't have to earn their livings as early on in their lives. Firstly, the Vietnam war was undoubtedly a very significant factor in the increased protests during the 60's.For example, the excessive bombing of North Vietnam lead in 1965 lead to many student protests, as so many civilians including women and children were being purposefully killed in order to ultimately, win the was by flattening Vietn am. This caused outrage amongst the student rebels. In particular, the student rebel group called Students for Democratic Society (SDS) used the Vietnam war to suggest that the US government was corrupt. The cause struck a chord with those at university more so than other groups of people due to the immense number of students that were made to go and fight.The average age of soldiers fighting the Vietnam war for America was 19, meaning almost every student knew someone that had been killed or injured due to the combat they were being forced to take part in. This lead to not only resentment for the war, but also fear that they would be called up to fight, and therefore even more resistance and protesting towards continuing the fight. The war faced huge resistance, and in a way gave the rebels a force and action to fight against. This could be argued as the stimulant for the protests, as they could now use the ideas of the racist, corrupt government with evidence.Many said the Vietnam war was a racist war, and that white America wanted to conquer Asia, as well as attack the gaining black equality within America. This was because in order to avoid ‘the draft' (being called up to fight once a month), many wealthy white Americans would enrol in universities or colleges. This would excuse them from having to fight, unlike other working classes and black Americans, who could simply not afford this escape route as they could not manipulate the system as easily, leading to a hugely disproportionate number fighting being black or working class.This figure was around 80%, increasing the ominous fear in students as the news of the deaths returned. Over 11000 were killed in 67, increasing to 16500 in 68. The many reasons for why the Vietnam war was so hated by many of the protests suggests its significance and its undoubtable impact on the Student Rebels. Although many argue the Vietnam war was the reason for the protests, it could be said that the protest culture wo uld not have happened without a big spark effecting the nation. This was the assassination of president J F Kennedy, who was shot in November 1963 causing deep sadness in much of the population.There were many theories concerning his death that spread around the youths of America, leading to further diminished trust amongst young people. Before the assassination, America was a different place; despite the Vietnam war, many said there was hope in this period, but the hope shattered when he was killed. Questions were raised about US society, as the civil rights movement took over encouraging civil disobedience as they said Kennedy would have wanted this because of his backing of the Freedom Rides.The shock of his death was overwhelming and arguably this caused the most fuel for the counter culture emerging than anything else. Along with the assassination of Martin Luther King and Kennedy, followed by the involvement in the Vietnam war, the impact upon the public was huge, and arguably , it was those drug crazed, protest evolved and in some cases, politically aware teenagers that came from this. However, this is not the only reason for the now more rebellious teenagers of America.As education became increased within a pupils lifetime and schooling lasting longer, many students were turning towards the SDS, who particularly focused on political issues and and came up with ideas for change within America. Many were becoming fed up with the untrustworthy American Federal government,and as this view became wider spread and more popular within the youth culture, many began favouring the idea of communism or a socialist movement. This new left group were key in organising protests and became more and more influential as numbers increased.In October 1963, their total membership was 610, however, after protests of Vietnam they became even more influential and an even more recognisable and known group. Those involved were still in education at various Universities and coll eges, meaning this age when previously they would have to go our and find a job and work to make a living was gone, and instead they could still afford to live off parents money. This split teenagers, some taking a political route, while others became more interested in ‘finding themselves' within the flower power movement.The opportunities for young people opened up within the 60s,and they were no longer held to finding a job and starting the typical American family lifestyle. They now had a time in their life that they could experiment with – possibly with various drugs – and this new sense of freedom and flexibility allowed more time for those wanting to reject the ‘too good' American society have the opportunity to protest. In conclusion, I think the main reason for the sudden development of the protest culture was the Vietnam war, as it gave students a cause to fight because of genuine opposition as well as the opportunity.It was incredibly significant in stimulating the protest culture as they faced the fear of being called up to fight themselves, causing incredible resentment of the war, as well as the arguments the students proposed that the war was indeed racist and the government corrupt. This alone was undoubtedly the most significant factor, although without events like the assassination of JF Kennedy, I do not think the movement would have been so big and influential, as there would have been less people backing the cause.

MS Flight Simulator Research Paper Example | Topics and Well Written Essays - 250 words

MS Flight Simulator - Research Paper Example Bruce Artwick started its development in 1977 and put it on the market for a range of computers with his company subLOGIC. Artwicks company certified Microsoft  a version of Flight Simulator known as  Microsoft Flight Simulator 1.00 in 1982 (Grupping, 2007). The Microsoft Flight Simulator gives its users the realistic experience of flying a plane. The aviation industry is making great use of the system for design and development and by training pilots and other flight deck crews in both military and civil aircraft (Anonymous, 2005). The newest versions, Microsoft Flight Simulator 2004  and  Microsoft Flight Simulator X, gratify pilots, would-be pilots and individuals who had dreamt of being pilots in similar fashion. While playing these, the new users can be frustrated due to its reality-based complex and difficult nature. But it can be rewarding for those who are skilled flight simmer. The latest versions also include enhanced weather simulation, alongside the ability to download real-world weather data and diverse air traffic environment with interactive  Air Traffic Control, player-flyable aircraft, interactive lessons and challenges, and finally aircraft checklists. Furthermore, there is availability of, both free and commercial upgrades and add-ons for flexibility and scope (Lackey,

Weekly questions Assignment Example | Topics and Well Written Essays - 500 words

Weekly questions - Assignment Example Apparently, US companies are tending towards outsourcing their customer service functions to companies that hire staff capable of communicating fluently in Spanish or English. While majority of international US companies have staff that is multi-lingual, most of them would still prefer to hire companies that possess a similar cultural affinity (Cromie & Zott, 2014). Therefore, they will tend to be more likely to outsource functions to locations that share a similar culture, thus preferring near-shoring. Although American companies have benefited immensely from offshore outsourcing in the past, the increasing investments in customer service has made them aware of the costs of miscommunication on their overall business. The US, as of 2013, had several trade sanctions and embargoes against several countries, including imposing embargoes on arms-related exports, financial restrictions, economic assistance restrictions, and dual-use exports controls. The embargo against Cuba is one example, which involves financial, economic, and commercial restrictions first imposed in 1960 and further extended in 1962 to cover almost all forms of imports (Coy, 2012). An arms-trade embargo has been in force since 1958 when Cuban rebels headed by Fidel Castro seized American properties and nationalized them. In addition, further actions to nationalize all privately-owned companies led to an embargo on all Cuban brown sugar imports. The US government responded to Castro’s Cold War alignment with the USSR by widening the scope of trade embargo restrictions, especially after Cuba hosted USSR missiles on their territory (Coy, 2012). This resulted in freezing of Cuban assets in the US and consolidation of all existing restrictions. Finally, in the wake of the shooting of unarmed US planes that killed four US citizens in 1992, the Helms-Burton Act restricted trafficking of property confiscated by the Cuban government

Emotional experience Article Example | Topics and Well Written Essays - 2500 words

Emotional experience - Article Example The social and psychological impacts of this enormous advancement of technology are points of debate from the very beginning, and therefore considerable research has been devoted to find out the truth and balance between the extraordinary fruit of technology, mental dilemma regarding acceptability of the less worse in comparison to the worst (Verberg et al, 2008, 2050-2055) so the best possible outcomes can be delivered to the clients who are now consumers with great financial stakes (Smeenk et al., 2001, 1420-1423). It has been already cited in the literature that emotional components in IVF irrespective of a successful outcome are very intense, and emotional components of the participants often influence outcomes (de Klerk et al., 2003, xviii47-xviii48). Added to it, the resultant gloom, grief, and depression in the couple from a miscarriage would further make the outcome precarious in the next attempt (Brady et al., 2008, 186-190). Knowledge in this area is a necessity since it is often invisible, and the practitioner must consider these effects with a priority, since overlooking these is unethical and unprofessional, leading to a situation of unaccountability. There is evidence of adverse emotional experiences in such patients; however, the questions how far and how much intense and important these are need to be answered in order to address the gap in research and to design an intervention (Cumming et al., 2007, 1138-1145). Evidence from literature will be sought to design a methodology tha t can address these questions, and validity and reliability of these methods will be sought. A proposal for data collection will be made, and prospective synthesis of the findings will be undertaken so the utility for practice can be determined. Brief Literature Review A literature review with the key words, "in vitro fertilisation", "miscarriage", "emotional experience", "psychological stress", "assisted conception", "assisted reproduction" and "United Kingdom" was conducted from appropriate databases, and research articles were located. The initial articles were narrowed down to combine key words, and ultimately 5 studies were selected for review. The findings are presented below. Although not recent, the study by Mahlstedt et al. highlights the basic tenets of the emotional experience of the couples undergoing IVF. The aim of the study was to undertake a self-administered questionnaire study for a period of 6 months on 94 IVF and embryo transfer patients with the objectives of acknowledging their emotional states and of developing strategies for providing emotional support. This study revealed that 77% of the participants reported that they perceive the loss of control as the most stressful dimension leading to feelings of vulnerability and intense stress. Aside from these they reported a wide range of emotions during a brief period of time. This emotional strain was a major factor of consideration when the decision about a repeat procedure

Atoms of metals and LIDAR Essay Example | Topics and Well Written Essays - 2000 words

Atoms of metals and LIDAR - Essay Example pag). LIDAR is a remote sensing technology that can measure distances or properties of a material by laser illumination (Sanderson n. pag.). Origin of metal atoms in the atmosphere Normally, meteoroids enter the Earth’s atmosphere between 11 to 72 kilometres per second. Friction between the meteor and air molecules in the upper atmosphere generates enough heat to disintegrate it to particles less than 1mm in diameter. These particles are deposited at an altitude of 70 to 140 km in the upper atmosphere (Von Zahn, Hoffner and McNeil, 149). McNeil, Lai and Murad acknowledged the fact that meteoric material is the most significant source of metal atoms in the upper atmosphere. However, the amount of metal atoms in the atmosphere differs from the amount present in the meteor itself. This is attributed to the process known as differential ablation. Differential ablation suggests that more volatile metals vaporize earlier than less volatile metal components in a meteorite. Comparison between sodium, magnesium, and calcium ablation revealed that sodium is the most volatile of the three elements. Thus, sodium ablates at a much higher altitude. On the other hand, calcium ablates at a much lower altitude. Therefore, the rate of conversion of elemental calcium into compounds in the lower atmosphere is the primary cause of calcium ion depletion (10899-10911). Aside from sodium, metallic atoms of potassium, lithium, calcium and iron make up the rest of the metal atom layer in the mesosphere. The discovery of other metal constituents started in 1973. Potassium ions detected through the use of ruby-laser-pumped dye laser components calibrated at 769.9 and 766.5 nanometres. Lithium ions were identified using a flashlamp-pumped dye laser calibrated at 670.8 nanometres with 800 millijoules output pulse energy. Calcium was detected with a dye laser calibrated at 422.7 nanometres (Abo 315). Thin layers of sodium, calcium and iron have been detected by LIDAR in the upper atmo sphere. These layers range from 100 metres to several kilometres thick and usually superimpose on a background layer 10 kilometres thick. Despite efforts to ascertain the origins of sporadic layers, no single scientific explanation was accepted (Clemesha 725). Chemical role of metal atoms in the atmosphere The formation of metal layers in the upper atmosphere has been instrumental in several vital atmospheric processes. Rapp and Thomas have confirmed the role of mesospheric metal layers in the formation of noctilucent clouds through the nucleation of ice particles in the upper atmosphere (715-744). Murphy, Thomson and Mahoney investigated the composition of aerosol particles in the stratosphere and discovered the existence of meteoric particles in stratospheric aerosol. Thus a link was suggested between mesospheric metal particles and the condensation of stratospheric sulphate aerosols (1664-1669). Atmospheric observation over the South Pole was initiated through LIDAR to measure th e seasonal variations of the mesospheric sodium and iron layer. The polar annual mean abundance is almost equal to mid-latitude readings while the mean centroid height is 100 metres higher for sodium and 450 metres higher for

Summary for an article of political economy subject Essay

Summary for an article of political economy subject - Essay Example Although disregarded by many, neo-liberalisation jumped the barriers into active politics establishing themselves as the best politics nationally and internationally. By 1971, United States, Australia, Britain, and New Zealand adopted these ideas to their domestic programmes. By 1980, Neo-liberalism had grown to higher levels in Britain and United states such that it sidelined Keynesianism and social alternatives. It formed the pattern that shaped all the other policies even if its rationality would still be contested. Non-English speaking countries like Japan, Germany, and Sweden thought Neo-liberal ideas as defensive to shore up the model of capitalism, which was under pressure from other successful models. Additionally, Neo liberalism model was thought as an-outdated capitalist model that lacked analytical tools to direct policies and remedies to problems. However, Neo-liberalism remained prominent on state economies of Britons and Americans. In 1990s, neo-liberalisation triumphed after the failure of public capitalists of Germans, Swedes, and Japanese. Neo-liberalism became the dominant ideology of analysing capitalism as a global network of accumulation. One paramount influence of Neo-liberalism is that it gives priority to capital as resources rather than capital as production. This way it would give the means to disengage from commitments taken up from the Keynesian era. Many politicians are adamant to keep neo-liberalisation, which makes it difficult to win electoral support by itself. Neo-liberalism has some limitations, but some of its ideologies establish a solid basis for political and economic