Scribd Logo
Upload

Welcome to Scribd!

  • Micro

    Uploaded by

    hassanmushtaq
    10 views5 pages
    The document discusses characteristics of an oligopoly market structure in the cement industry in Pakistan. It notes that the cement industry has few large producers that control a high percentage of the market share, barriers to entry for new firms, and that firms engage in interdependent pricing where they base price decisions in reaction to what other firms are doing. The cement product is also described as homogeneous.

    Original Description:

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses characteristics of an oligopoly market structure in the cement industry in Pakistan. It notes that the cement industry has few large producers that control a high percentage of the market share, barriers to entry for new firms, and that firms engage in interdependent pricing where they base price decisions in reaction to what other firms are doing. The cement product is also described as homogeneous.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    10 views5 pages

    Micro

    Uploaded by

    hassanmushtaq
    The document discusses characteristics of an oligopoly market structure in the cement industry in Pakistan. It notes that the cement industry has few large producers that control a high percentage of the market share, barriers to entry for new firms, and that firms engage in interdependent pricing where they base price decisions in reaction to what other firms are doing. The cement product is also described as homogeneous.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 5

    Characteristics

    • Few producers
    • High level of market concentration
    • Barriers to entry
    • Oligopoly paves way for interdependent
    pricing
    • Homoge
    Homogeneous Product
    • Also known as identical product
    • Includes raw materials like aluminum , copper ,
    steel , petrol , etcetera .

    • Cement can be considered as homogeneous


    product.

    • Used by other industries for manufacturing their


    product.
    Few large producers and many buyers

    • Usually 3, 4 or 5 firms occupy the market


    - Askari cement , DG cement, Lucky
    Cement, Maple leaf .
    • 4 largest firms occupy 40% of market share
    • Mergers
    - Merger of Dadabhoy cement with Lucky
    cement
    Barriers to Entry
    • New firms have low market share and have to produce at
    higher price

    • Huge setup cost

    • Government Regulations

    • Cartels

    • Brand loyalty
    Interdependent Pricing
    • Each firm takes into account the likely
    reactions of other firms in the market when
    making pricing and investment decisions.

    • Keeping price rigid

    • If a firm reduces product price others follow


    suite and cut down their price as well.

    You might also like