Answer to Question #88714 in Macroeconomics for Jonathan meria

Question

In which sector in the Papua New Guinea economy is oligopoly prevalent?

Answer 1

Oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. The concentration ratio measures the market share of the largest firms. A monopoly is one firm, duopoly is two firms and oligopoly is two or more firms. There is no precise upper limit to the number of firms in an oligopoly, but the number must be low enough that the actions of one firm significantly influence the others.

Oligopolies in history include:

- steel manufacturers

- oil companies

- Mining, including oil, copper and gold

- Internet operators

- forestry industry

Papua New Guinea is rich in natural resources, but their development is hindered by rugged terrain and the high cost of building infrastructure. Because of this high cost, new companies cannot enter the sectors of oil, gold, copper, oil refining, and timber industry, and oligopoly has been historically formed in these sectors from several large companies.

 In Papua Guinea, two Internet operators and two mobile operators, which are duopolies (a type of oligopoly).