Eco204 Week 3 Assignment

Oligopolies and the Competition

ECO 204
Prof. Nathan Rondeau
June 29th, 2012

In the current economic climate, it is important for future patronage leaders to understand the industry they are in. What makes a production line successful, what differentiates their product from the competition, how can their firm become much competent? Pricing and efficiency can also be modify by the market structure of their business. Is the firm an oligopoly or a monopoly? This paper will analyze the most recent (2007) U.S. census Bureaus Economic Census for Manufacturing to determine the four-firm submerging ratio for four specific categories. This information will servicing the reader identify the level of competition per kinsperson, which category is an oligopoly and why, and the cons oligopolies apply on our society.
In order to identify an oligopoly, there must first be an understanding of the term. As Case, Fair, & Oster defer (2009), An oligopoly is an industry dominated by a few firms that, by virtue of their individual sizes, are large enough to exercise the market price (pg. 283). This market is structured by several(prenominal) firms within the industry. They can dictate the price of products to gain more profitability and even eliminate new competitors.




The first category this paper will analyze is Fluid Milk (311511) which gibe to the 2007 U.S. Census Bureau had a four-firm concentration ratio of 46%; simply meaning the top 4 draw producers lend 46% of the industrys total production. This is out of 280 milk producers. The next four companies only produce an additional 12% combined, meaning that the remaining 272 firms share a very diminutive portion of the pie. With that in mind, the level of competition within the unruffled milk industry is very strong amongst its top producers. dairy Farmers of America and California Dairies, Inc. are the top two producers and hand 30% of the total milk produced (Consolidation and Concentration in the U.S. Dairy...If you wish to get a full essay, order it on our website: Orderessay



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