Charging different prices to different buyers for identical goods is price discrimination. - youBack again. Shas is back. Tell a friend. Now everyone report to the dance floor, to the dance floor, to the dance floor. Now everyone report to the dance floor. Alright, stop. Legion time. The Good, the Bad, and the Alpha Legion. charging different prices to different buyers for identical goods is price discrimination.
Legal regulations  A well-known example of monopolistic market power is Microsoft's market share in PC operating systems. The United States v. Microsoft case dealt with an allegation that Source illegally exercised its market power by bundling its web browser with its operating system.
In this respect, the notion of dominance and dominant position in EU Antitrust Law is a strictly related aspect. Within this market structure, the market is highly concentrated and several firms control a significant share of market sales.
Homogenous or differentiated products. Barriers to entry.
This includes, but is not limited to, 'technology challenges, government regulations, patents, start-up idfferent, or education and licensing requirements'. It is salient to note that only a few firms make up the market share. Hence, their market power is large as a collective and each firm has little or no market power independently.
The graph below depicts the kinked demand curve hypothesis which was proposed by Paul Sweezy who was an American economist. Kinked Demand Curve Oligopolistic firms are believed to operate within the confines of the kinked demand function.
A group of firms that explicitly agree to affect market price or output is called a cartel. Sources of Market power[ edit ] There are several sources of market power including: High barriers to entry.
These barriers include the control of scarce resources, increasing returns to scale, technological superiority and government created barriers to entry. Increasing returns to scale. Firms that experience increasing returns to scale also experience decreasing average total costs and therefore become more profitable with size.
This barrier makes it difficult for new entrants to succeed. Firms like pricws, cable television and telecommunication companies fall within this category. A firm seeking to enter such industries require the ability to spend millions of dollars source starting operations and generating revenue. Brand loyalty of consumers and value placed by consumers on reputation.]