Transcript Examples of Oligopoly

Oligopoly
CHAPTER
16
Examples of Oligopoly
These 10 industries are examples of oligopoly.
They have a small number of firms, shown in brackets after the
name of the industry.
Examples of Oligopoly
The bars measure the percentage of industry total revenue
received by the 20 largest firms.
Examples of Oligopoly
The number on the right is the Herfindahl-Hirschman Index.
OPEC Global Oil Cartel
OPEC was created
in the 1960s.
Its objective can be
interpreted as
“restricting the
production of oil to
keep the price
high.”
The price of oil
increased from $7 a
barrel in 1970 to
$55 a barrel in
1981.
OPEC Global Oil Cartel
During the 1980s,
new sources of oil
supply opened up,
and OPEC lost
control of the global
market—the price
tumbled.
During 2004 and
2005, OPEC again
dominated the
market, restricted
supply, and raised
the price.
Duopoly in Computer CPUs
The CPU chip in
your computer or
game box is made
either Intel
Corporation or
Advanced Micro
Devices (AMD).
Intel dominates this
market as the pie
charts show.
Duopoly in Computer CPUs
The graph shows the
prices of some of the
most popular CPU
chips in May 2005.
At comparable clock
speeds, AMD chips
are priced higher than
Intel chips, but Intel
makes the fastest
chips.
Duopoly in Computer CPUs
Competition between
Intel and AMD is like
the duopolists’
dilemma.
The game is played
on both price and
product design and
quality and across a
range of products.