Write and essay on economic analysis of two or more oligopoly market firms. Your essay should address the following:
- How do firms in the industry compete?
- How are prices determined?
- What effect does elasticity of demand have on the competition?
- How do the firms use game theory in their interaction?
- Is profit maximized for the industry or do they have a suboptimal equilibrium?
- Is this competition beneficial or harmful for the consumers?
The assignment in economics deals with the concepts of oligopoly, competition among firms in an industry, price determination, elasticity of demand, application of game theory by firms, etc are discussed in detail in the solution. For example, oligopoly is a market is defined by few large sellers. These sellers dominate the market. In such situations price and advertising play an important role in determining the market share for each and every seller provided if the products are homogenous or similar.
Total word count is 1152