Explain the models of oligopoly behaviour that we discussed. Discuss whether the respective assumptions are realistic.

Discuss utilizations where divergent models might be the most divert (think for example of market for raw materials or for air travel). In this essay I am going to discuss models of oligopoly behavior and analyse them and moot whether they argon realistic or non and evaluate them with trustworthy examples where they may be most suitable. Oligopoly is delimitate as a market form in which a market is rule by a sm exclusively bet of sellers. There argon many different models for oligopoly behaviour much(prenominal) as the Cournot Solution, the Sweezy Kinked convey Curve Solution, the Stackelberg Model and the Bertrand Model. The Cournot model focuses on the behaviour of quantities, prices and benefit within a duopoly (if two self-coloureds argon selling products in the comparable market). Within this model it is presume that one fuddled will not react to all changes from the early(a)(a)wise riotouss decision. faithful 1 can choose an output signal of p1, assum e firm 2 had a fixed level of output at p2. The same assumption can be do the other mode; for example, p2 is chosen supposing that p1 can be enured by the second firm as given. Within oligopolistic markets on that point are a huge number of firms so this guess makes common soul as firms can make their decisions without basing it on anothers decision.

However, on the other hand, even though it is in a duopoly, in the Cournot equilibrium other firms will still bill of fare change of the other firms if quantities are not changing. Another way to analyse the Cournot equilibrium mathematically is to say the ind ustry collect curve is: An isoprofit curve! is the locale of points in a situation defined by different levels of output for both firms 1 and 2 which yield the same level of profit to firm 1.` They... Cournot models make more sense if you think of the firms as picture capability, and then producing up to capacity (so marginal costs are low) If you want to get a full essay, order it on our website: OrderCustomPaper.com

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