OligopolyCHAPTER16

Examples of Oligopoly

These 10 industries are examples of oligopoly.

They have a small number of firms, shown in brackets after the name of the industry.

Examples of Oligopoly

The bars measure the percentage of industry total revenue received by the 20 largest firms.

Examples of Oligopoly

The number on the right is the Herfindahl-Hirschman Index.

OPEC Global Oil Cartel

OPEC was created in the 1960s.Its objective can be interpreted as“restricting the production of oil to keep the price high.”

The price of oil increased from $7 a barrel in 1970 to $55 a barrel in 1981.

OPEC Global Oil Cartel

During the 1980s, new sources of oil supply opened up, and OPEC lost control of the global market—the price tumbled.

During 2004 and 2005, OPEC again dominated the market, restricted supply, and raised the price.

Duopoly in Computer CPUs

The CPU chip in your computer or game box is made either Intel Corporation or Advanced Micro Devices (AMD).

Intel dominates this market as the pie charts show.

The graph shows the prices of some of the most popular CPU chips in May 2005.

Duopoly in Computer CPUs

At comparable clock speeds, AMD chips are priced higher than Intel chips, but Intel makes the fastest chips.

Competition between Intel and AMD is like the duopolists’ dilemma.

Duopoly in Computer CPUs

The game is played on both price and product design and quality and across a range of products.