Sebastian Del Basto Posted November 4, 2014 Report Share Posted November 4, 2014 HI I was hoping to receive some advice on my last Internal assessment on economics,since I'm struggling on how to structure it. I've decided to do it about HL theory of the firm and market structure, my article is about how Coke and Pepsi compete by the launch of new different sodas" In the first paragraph i defined this market as an Oligopoly and link the competition of Coke and Pepsi to the assumption Oligopoly has; - The concentration ratio of Pepsi, Coke, Dr Pepper..etc -Both sell similar products, "close substitutes" -Barriers to entry - The Interdependence (I don't know if i must include a diagram in the first paragraph) On the second paragraph i was going to show how Pepsi and Coke compete by using the Kinked Demand Curve and their non price competition and how they promote their brands then on third paragraph the disadvantages of an oligopoly High concentration reduces consumer choice. Cartel-like behaviour reduces competition and can lead to higher prices and reduced output. Firms can be prevented from entering a market because of deliberate barriers to entry. There is a potential loss of economic welfare. Oligopolists may be allocatively and productively inefficient. (DIAGRAM ) Advantages of Oligopoly oligopolies may adopt a highly competitive strategy, in which case they can generate similar benefits to more competitive market structures, such as lower prices. Even though there are a few firms, making the market uncompetitive, their behaviour may be highly competitive. Oligopolists may be dynamically efficient in terms of innovation and new product and process development. The super-normal profits they generate may be used to innovate, in which case the consumer may gain. ( Price stability may bring advantages to consumers and the macro-economy because it helps consumers plan ahead and stabilises their expenditure, which may help stabilise the trade cycle. AND I DONT KNOW HOW TO DEVELOP MY EVALUATION PLEASE HELP!!! Reply Link to post Share on other sites More sharing options...
King112 Posted November 5, 2014 Report Share Posted November 5, 2014 Well. IB states that you need to have a diagram after your first paragraph. And it needs to be a third of a page. NExt you need to explain what's going on. Like fall in demand, supply etc etc. Thirdly, refer to the article to support your claim, and explain what the quote is.Hope this helps Reply Link to post Share on other sites More sharing options...
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