Economics: Oligopoly TescoWatch this thread
Im new to Economics
Tesco is an oligopoly as it is one of the few dominant firms in the supermarket market. There is a lack of competition. The main competitors are Tesco, Sainsbury’s and Asda, making the three firm concentration ratio high.
A concentration ratio is a way to measure how concentrated (little competition) a market is.
Oligopolies also act interdependently. (Their market behaviour.) This means the supermarkets cannot act independently of each other.
This prevents a price war, which benefits the consumer but cost of the product ends up being higher than the profit.
When firms in an oligopolistic market interact with each other, this is known as collusion. This is illegal.
Let me know if anything was unclear, hopefully this wasn’t utter nonsense