Answer to Question #288193 in Microeconomics for Tusshar

Question

a. What kind of market structure has evolved in the market of mobile handsets? Discuss the 

characteristics of the market structure. 

Answer 1

Solution:

The market for mobile handsets is under an oligopoly market structure.

An oligopoly refers to a market structure where a few firms dominate the market, none of which can keep the others from having significant influence.

 

The characteristics of an oligopoly market structure are as follows:

·        High barriers to entry.

·        Existence of price rigidity.

·        Lack of uniformity.

·        Interdependence of firms.

·        Differentiated products.

·        Non-price competition.