Paper Topic:
Analysis of oligopoly market structure (Tabacco Industry)
June 17 , 2009 Analysis of Oligopoly Market Structure In Tobacco Industry Outline This essay focuses on the tobacco industry with respect to its oligopolistic market structure . The basic characteristics of the oligopoly are discussed and followed by the identification of the tobacco industry as a tight oligopoly . The various market forces and the resulting threats associated with the market structure are then elaborated upon Oligopoly is a market structure where there are a few sellers for a product or a service . It is the most prevalent form of market
br organization in which the few sellers might sell homogeneous or differentiated products depending on the type of the industry . Some of the products such as steel are homogeneous while some other products like cigarettes are a part of the differentiated product line in the oligopolistic industry . The action of each firm in the industry affects the other firms . The Sweezy 's kinked demand curve model of oligopoly explains the asymmetry in the response of other firms to one firm 's price change (Peterson Lewis , 1999 . Since the price competition in the oligopoly market structure can be ruinous , the different firms compete with each other on the basis of non-price competition factors such as product differentiation , advertising and other marketing strategies . The interdependence and the rivalry amongst the firms form the most distinguishing characteristic of the oligopoly market structure . The type of product produced may affect the strategic behavior of the Oligopolists . The cooperative Oligopolists follow the pattern followed by the rival...
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