Which of the following market conditions in an oligopoly increase the probabilit

Question

Which of the following market conditions in an oligopoly increase the probability that it will be able to maintain prices well above the competitive market level? Explain your answer briefly in each case. A high degree of brand name identification by consumers A dominant price leader 10 or 12 firms in the market instead of 2 or 3 Cartels are legal Technological and organizational change is creating opportunities to realize economies of scope and scale in the market Barriers to new entrants are not very high

Explanation / Answer

a and f will be reasons for helps the firms to charge more price than its equilibrium price in the market. when the firm and its product is having higher goodwill and brand name in the market, consumers will ready to pay higher amounts to own it. when there are barriers to entry and very few firms are existed in the industry, then customer may need to pay higher amount if the producer charge. because of lesser alterantives he needs to pay higher amounts.

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