Market Supplies: Oligopoly

For oligopolies, only a small number of companies manage market supply, and oligopolistic markets have high barriers to entry and withdrawal, existing companies enjoy exclusive status. (Parkin, 2011) Below are some of the prominent features of some oligopolistic markets. Interdependence: Companies that are operating under oligopolies are interdependent in the decision-making process. The same reason is that the number of companies operating in the market and competing with each other is very small and changes in company prices and input levels directly affect competitors, so competitors are forced to change . Retaliation against price and ou

Oligopolis exists in Hong Kong's aviation business, with a limited number of airlines leading the market. Every company manages the level of price and output, and is preventing entry and exit. The oligopolistic market is characterized by supply terms which are partly dependent on competitor production and pricing. In the ideal world, the oligopolistor wants to set the price at the level of profit maximization of all airlines in the market. If the company collaborates with the set price, it may result in producer monopoly and higher profit if supply is restricted. In the case of oligopoly, joint interests are achieved by the influence of price setting between airlines and sharing agreement of routes. In the oligopolistic market, airlines can change production and prices while taking into account the reactions of competitors.

The aviation industry is classified as one of the oligopolistic market structure. The oligopolistic market is dominated by many companies that dominate the industry, which is incomplete competition. Oligopoly companies have the power to set prices for specific products and produce multiple types of production levels. When an oligopoly occurs in the market, competitors compete with each other to produce the same goods. As a result, they will develop new ideas such as lowering the price of goods and other ways to increase market share. In other words, oligopolistic companies are interdependent.

An oligopoly is a market that is dominated by multiple suppliers or few companies within the industry. Oligopoly is a small part of the business that manages a particular product and service market. Oligopolies are dominant compared to the other markets in which they operate. Therefore, business has a big impact on market price. Furthermore, with oligopoly, the company is called a price seeker. The oligopolistic market includes the automobile industry, the soft drink industry, the aerospace industry, and the photographic equipment industry.