Examples Of Oligopoly Market

1813 Words8 Pages
POSITION PAPER “This House Believes that Oligopoly is the Only Market Type for Country to Develop Its Domestic Market” CASE STUDY: INDONESIA Brief Explanation about Oligopoly Market Oligopoly market is one of the economic type of market which has several characteristic that differenciate it from another type of market. First, there are only a few firms that make up an industry in the market. Second, those few firms has control the price (tend to be into price competition), and like monopoly market type, an oligopoly also has high barriers for newcomer firms to entry. Third, the products that the oligopolistic firms produce are often nearly identical, and therefore, the firms which are competing for the market share are independent as a result…show more content…
We had been agreed to take the case of Indonesia whether this oligopoly market type will be implemented or not in Indonesia. I strongly argue that this oligopoly market type is not only the market type to develop Indonesia’s domestic market. Besides, it is also not suitable enough to be implemented in Indonesia, looking to the current Indonesia’s economic development. Most importantly, oligopoly market type is not represent the Indonesian values which is stated in Pancasila and UUD 1945 as the basic fundamental guideline for the Indonesian government…show more content…
It may creates inequality of welfare distribution because of the oligopolist profits are very large and accepted on an ongoing basis. This condition could result in the inequality of welfare distribution. Since it is only composed of a few firms/companies, the behavior of the company or every decisions/policy that a company creates has impacts to another company and automatically causing the dependence of each strategy or action taken. For addition, the dependence is especially in pricing, where pricing is done by one company will soon be followed by other companies, so that eventually led to a certain level of price stickiness in the market of oligopoly. This dependency will potentially lead to an ‘unhealthy competition’ in the market and might resulting conflict between those companies. Most importantly, it will not develop the Indonesia domestic market as what we wanted, but on the

More about Examples Of Oligopoly Market

Open Document