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Published by: hassanmushtaq on Sep 16, 2010
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05/12/2014

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Characteristics

‡ ‡ ‡ ‡ Few producers High level of market concentration Barriers to entry Oligopoly paves way for interdependent pricing ‡ Homoge

steel . ‡ Cement can be considered as homogeneous product. . petrol . copper . ‡ Used by other industries for manufacturing their product.Homogeneous Product ‡ Also known as identical product ‡ Includes raw materials like aluminum . etcetera .

‡ 4 largest firms occupy 40% of market share ‡ Mergers . Lucky Cement. Maple leaf . DG cement.Merger of Dadabhoy cement with Lucky cement . 4 or 5 firms occupy the market .Askari cement .Few large producers and many buyers ‡ Usually 3.

Barriers to Entry ‡ New firms have low market share and have to produce at higher price ‡ Huge setup cost ‡ Government Regulations ‡ Cartels ‡ Brand loyalty .

Interdependent Pricing ‡ Each firm takes into account the likely reactions of other firms in the market when making pricing and investment decisions. ‡ Keeping price rigid ‡ If a firm reduces product price others follow suite and cut down their price as well. .

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