1) Oligopoly is when a particular market is controlled by a vitiated group of firms. For eccentric supermarkets, there be three (there ordinarily exist three companies) companies which dominate the market, Wong and Metro, Santa Isabel and Plaza Vea, and Tottus.
The main assumptions that economists yield when talking about a situation of Oligopoly atomic number 18 assorted; three or four large companies dominate the industry, however small companies do exist (smaller companies in the recent example would be for example Arakaki, a sole trader company); firms are interdependent, al will watch what the competitors do and act wherefore (when Wong created the Bonus card, it did not even passed a week when Santa Isabel created the Más Más card); the existence of the kinked demand curl (which we will see what it is on question b); there are barriers to entry, this means it is difficult for other firms to enter the industry; non expense competition, as companies cannot contest by prices, therefore they have to compete with the service they offer (for example the Bonus and the Más Más cards); the oligopoly must be collusive (collusion), this means when the companies, which dominate, work together to maintain genuinely high prices at the expense of the consumer (for example Umbro and Adidas, sell football shirts at very high prices, as a Manchester United shirt be approximately $50), companies which work together to maintain high prices should be fined, as it is illegal. Advertising is also essential to maintain a high profit and market share, and also something very important, which is to bourgeon brand loyalty (for example, once I began to buy Sony electro domestics, I begin to have a brand loyalty, as I never had a single problem with them).
2) The causes of price constancy (when prices are stable,
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