Question

Provide a real-world example of a market that approximates each oligopoly setting, and
explain your reasoning. (LO2)
a. Cournot oligopoly.
b. Stackelberg oligopoly.
c. Bertrand oligopoly.

No textbook answers please

Answer 1

A) The Cournot oligopoly refers to which does not address the issue of prices, in this type of oligopoly market the competitive companies must decide the Quantity of Output. Cournot oligopoly is when there are few firms in the market serving large consumers, when the firms produce either different productsor homogeneous products, when each firm believes that the rivals will hold their output constant if it changes its output and no free entry and exit . Managers in Cournot model bring different choices that will affect the total output and they hope that their different choices will not affect the choices of their competition. In order to apply Cournot oligopoly model, the products on a marker must be either the same or differentiated. A situation in which company has no incentive to change its output given the other companies output is called Cournot equilibrium . The real world examples for Cournot oligopoly are The Organization of the Petroleum Exporting Countries( OPEC ) in which those countries decides how much quantity of oil they will produce because the Quantity of oil produced affects the price of oil in the market.
You can also take example of Airlines also

B) Stackelberg oligopoly – Stackelberg oligopoly refers in which there is one firm which assumes the leader role and the other firms will follow their footsteps. They are the firm that makes the quantity of output produce decision before all other firms and fluctuate the market. A real life example of this would be with united state company " Apple". They introduced their products like iPads, iPhones, and iPods. I guess when the first iPod was released, MP3 players tried to make the same dent in the market but Apple remained the leader. Currently, there are lots of products similar to Apple products such as ones from windows and amazon.

c. Bertrand oligopoly – A Bertrand oligopoly refers that can be described as an industry where there are less or few competitors where they produce same products.
Real life example of this industry would be aluminum. Aluminum as a product that never changes and remains the same for all companies. There are also very less firms competing in this industry. If any one of the firms were try to lower the cost of their selling price of aluminum product , so then all the other firms di in order to keep the competitivenes