1. OLIGOPOLY
PRESENTED BY
AMERESH SETHI
ARPITA GAIKWARD
CHETAN CHAVHAN
DIMPLE RAMNANI

2. CONTENTS
• INTRODUCTION
• FEATURES
• KINKED DEMAND CURVE
• CASE STUDY

3. INTRODUCTION
• This is a market situation where
there are more than 2 producers of
a product.
• When there are two producers, it is
called duopoly, which is also an
imperfect market situation and so a
special case of oligopoly.
• The number of producers in
oligopoly are lesser than that of
perfect competition and

4. INTRODUCTION
• When you do a study of the detailed
features we can relate to the real
life market structures.
• It is an imperfect market with few
sellers of similar or
differentiated products.
• The few firms in oligopoly enjoy a
high degree of market power.
• The market power depends on the
number of sellers, barriers to

5. INTRODUCTION
• Based on these criteria oligopoly
enjoys substantial market power,in
this market condition, a few firms
dominate.
• Based on these criteria oligopoly
enjoys substantial market power,
in this market condition, a few
firms dominate.
• Tyre manufacturers- Dunlop,
firestone, dominate.

6. FEATURES OF OLIGOPOLY
1.Number of producers : There are
very few producers in an oligopoly.
The market is shared among a few
producers. Example of homogeneous
products - steel, coal, copper. The
producers of these products
compete on the basis of differences
in product like- different
packaging,colour, flavour.
2. Huge Investments to Start

7. FEATURES OF OLIGOPOLY
3.Product Differentiation: The
producers in an oligopoly market
compete on the basis of product
differentiation, which is a
distinguishing feature of oligopoly.
4. Advertising : In oligopoly market
situation, the producers are forced
to advertise their product .
Aggressive advertising measures are
undertaken with a view to capture

8. FEATURES OF OLIGOPOLY
5. Group Behavior and
interdependence :
6. The oligopolistic faces an
indeterminate demand curve:
There is a lot of interdependence
among the oligopoly producers.
Producer Output Market share
Nokia 8000 40%
Samsung 6500 32.5%
L.G. 5500 27.5%

9. KINKED DEMAND CURVE
• The Kinked Demand Curve The
demand curve under oligopoly is
indeterminate.
• This is due to the interdependence
of the oligopoly producers. Let us
examine what happens if a producer
under oligopoly reduces the price.
• In an oligopoly situation, an
oligopolistic can expect three
kinds of reactions if the price is

10. KINKED DEMAND CURVE

11. KINKED DEMAND CURVE
• Suppose Nokia reduces its price to
Rs. 900. This may increase the
sales, depending on the response of
the oligopolists. If nobody
responds, the oligopolist can go to
point D.
• What happens point D? At this point
Nokia will be able to sell more
hand sets. What will happen to the
other companies, Samsung and L.G.?

12. KINKED DEMAND CURVE
• But if the prices are reduced it
leads to similar reactions from
rival forms.
• Various factors have to be
considered by a producer , when he
goes ahead with the decisions to
reduce price spend money on
advertising his product or taking
investment decisions.
• The firms are involved in strategy

13. CASE STUDY OF GE

14. CASE STUDY OF AVIATION
INDUSTRY