What is an oligopoly?

Aims• Explain the meaning of

oligopoly

Key Concepts• Oligopoly• Collude• Cartels• Price War

• An oligopoly occurs when a few firms dominate a market.

• In the UK– Car industry– The petrol market– The airline industry– The banking sector– The supermarket sector

• In these industries the largest few firms have a large market share

• Firms are said to be interdependent (the actions of one firm will affect the other)

• This provides a temptation to work together (collude) to maybe fix the price or agree on how much to produce (cartel behaviour)

• Firms may also compete fiercely with one another (price war)

Comparing market structuresDefinition Number

of firmsBarriers to entry

Availability of information

market power

Type of good

Competitive markets

Oligopoly

Monopoly

Case Study: Tesco

Case Study: Tesco

• Your task is to make a written report on the supermarket chain Tescos.

• You will use three main websites to gather your information;

• http://www.tescoplc.com/ - details of the business

• http://www.tesco.com/ - Consumer website

• http://www.tescopoly.org/index.php - Criticism of Tescos

Case Study: Tesco

Report Criteria: 1) Outline key statistics:Foundation/ history of the company, number of employees, number of stores, different types of stores, range of products, value of company, global activities etc.

2) What are the benefit to a) consumers and b) the local economy of having a Tesco? 3) What are the benefits to the UK as a whole of having Tesco?4) What are the positive and negative views of Tesco’s interenational operations? 5) What potential damage can be caused by Tesco? (www.tescopoly.org) to consumers and local businesses? 6) Does Tesco exhibit all features of an oligopoly?

Case Study: Tesco

• The report should be: • Presented in a professional manner.• Cover all questions.• Include relevant diagrams to support your points.• Printed: Due next Tuesday. • c1000 words in length