Posts Tagged ‘oligopoly’

An Oligopoly is…

Thursday, June 30th, 2011

An oligopoly is a situation in which a small group of organizations dominates a particular market. The actions of these individual “oligopolists” affect one another and can collectively influence prices and production in the marketplace.

Oligopolies can exist both intentionally or unintentionally. For example, Apple and Dell computers dominate the market for laptops because they tend to sell more products than their competitors. But they’re not working together, so the dominance is unintentional. On the other hand, OPEC member countries have joined together and formed a cartel to intentionally dominate the oil market and keep prices high.

A Cartel is…

Wednesday, September 23rd, 2009

A cartel is a group of people or organizations in the same industry that work together to keep prices high so they can make more money. OPEC, for example, is an oil cartel. If any one of the member countries dropped their prices, people would flock to buy from that country, and the others would have to lower prices to compete. By all agreeing to keep their prices equally high, consumers don’t have a choice and all the members of the cartel make more profit.