https://padlet.com/BISHumanities/53u5qckr5r4uzzqg Honing your skills of DDEE en-us 2021-05-04 13:15:41 UTC 2023-03-23 18:36:44 UTC hello@padlet.com BISHumanities https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489465209 This can be seen in the sneakerm market as there are 4 -5 firms (nike, adidas, puma, underarmour) that make up a majority of the market share, allowing them to have price setting ability. This is due to marketing, endorsement, barriers to entry, etc.]]> 2021-05-04 13:15:41 UTC https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489465209 BISHumanities https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489465210 Assuming that there are no externalities in this market, the demand curve is equal to the marginal social benefit curve and the marginal cost curve (supply) is equal to the marginal social cost curve. Thus, for the resources to be allocated efficiently, with no market failure, the price and quantity would have to be set where the average revenue (demand) curve is equal to the marginal cost curve. This would lead to a price of P* and a quantity of Q*. However, if an oligopoly is left to set its prices, it would seek to set the price which would maximize its profits, which is where quantity is equal to where the marginal revenue is equal to marginal cost. This would lead to a quantity sold of Q1 and a price of P1. Therefore, oligopolies are a type of market failure as they do not output at the quantity which would maximise social surplus, and have a price higher than the optimum price for society.]]> 2021-05-04 13:15:41 UTC https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489465210 BISHumanities https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489465214 market failure in an oligopolistic market]]> 2021-05-04 13:15:41 UTC https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489465214 BISHumanities https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489465218 Oligopoly is a type of market structure in which a few firms make up a large share of the market. Firms in this market have a downward sloping demand curve as they have price setting ability due to factors such as differentiated products, branding and barriers to entry. Market failure refers to when resources are not allocated efficiently in the market, leading to externalities. Marginal social benefit does not equal to marginal social costs and thus community surplus is not maximised. ]]> 2021-05-04 13:15:41 UTC https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489465218 https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489854619 2021-05-04 14:30:11 UTC https://padlet.com/BISHumanities/53u5qckr5r4uzzqg/wish/1489854619