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 let (think for example of market for raw materials or for air travel). In this essay I am going to discuss models of oligopoly demeanour and analyse them and moot whether they argon realistic or not and evaluate them with trustworthy examples where they may be most suitable. Oligopoly is delimit as a market form in which a market is rule by a sm entirely repress of sellers. There argon many different models for oligopoly behaviour such 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 sour that one fuddled will not react to all changes from the early(a)(a)wise watertights decision. faithful 1 can choose an widening of p1, presume firm 2 had a fixed level of output at p2. The same assumption can be do the other expressive style; for example, p2 is chosen supposing that p1 can be hard-boiled by the second firm as given. Within oligopolistic markets on that point atomic number 18 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 keep change of the other firms if quantities are not changing. Another way to analyse the Cournot equilibrium mathematically is to say the in dustry look at curve is: An isoprofit curv! e is the locale of points in a plaza 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 compass 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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