s with a small market share to enter the oligopoly market and produce enough to make the product cheap for consumers to buy. The small amount of large firms can often produce large amounts of quantity to provide for all consumers to purchase. It is difficult for new firms to win market shares form existing producers, particularly if those firms have large advertising budgets, licenses, design patents or restrict access to raw materials on one way or another. Oligopoly is a market structure, which is especially vulnerable to restrictive trade practices. The main characteristics of a pure monopoly are: Only one seller within the market. The goods produced have no close substitutes. There are extreme barriers to entry. Complete control over price. A monopoly is an industry in which there is one supplier of a good or service that has no close substitute and in which there is a barrier preventing new firms to enter. The supply of water and gas are local monopolies, while Australia Post, B.H.P and C.S.R. are examples of national monopolies. As there is only on supplier, the firms can chose where on the demand curve the industry will operate. They can either determine the price or the quantity traded. Either they can sell less at a higher price or sell more at a lower price; therefore their decision is based on maximizing their total profits.The key feature of a monopoly is the existence of barriers preventing the entry of new firms. It is once the firm has entry the market system that is losses the advantage of monopoly control. Some barriers to entry may include; control over vital raw materials, tariff protection from importers, protective government legislation, temporarily low price to force out competition and large research and development budgets to help monopolists maintain their technological advantages over potential rivals. As there is no existence of competition, advertising is mainly focused on public relations or sponsorship o...
