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Tuesday, May 7, 2019

Anti competitive behaviour amongst oligopoly firms and government Essay

Anti competitive behaviour amongst oligopoly firms and government regulations - Essay ExampleFor this study, a brief theory of competition truth leave alone be provided followed by discussing some economic factors that enables oligopolistic firms to violate the competition law in the markets. Upon discussing the negative economic consequences of forming oligopoly firms, the role of government regulations on how to control and minimize the negative equal of collusion within the oligopolistic market will be thoroughly discussed.Competition law promotes free manage and healthy competition among the local and international businesses in order to protect the economic welfare of the consumers from businesses that will abuse its market power within a particular industry. (Vedder, 2004 Opi, 2001)As part of promoting free handle in the market, competition law is very much focused on eliminating and reducing the cases of monopolistic competition. Basically, the forwarding of a free trad e competition enables the consumers to enjoy the privilege ofWith the purpose of dominating the market, crossing characteristics regularise the ability of oligopoly firms to enter into collusion. Using the Nash benchmark, the study conducted by Engel (2007) reveals that there is a higher possibility for companies that carry heterogeneous products with few substitutes to collude as compared to businesses that sell homogenous products. It means that businesses that offer heterogeneous products start out more competitive advantage or niche as compared to other businesses.The size of the market and the proceeds of manufacturers that produces the same product also affects the ability of oligopolistic firms to enter into collusion. Basically, the big the market size in footing of the total number of people within a population would mean that there is a bigger demand for the product. On the other hand, the lesser the number of manufacturers that produces the same type of goods would mean that the supply for the product would be lesser as compared a situation

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