RevolutionToast Posted August 3, 2014 Report Share Posted August 3, 2014 I'm currently doing my Extended Essay on finding the market structure of the internet service providers in the country i'm living in. For my essay, i'm considering Monopolistic Competition, Perfect Competition and Oligopoly as possible outcomes. However, i'm wondering whether it would be fair to say that the firms could be showing monopolistic traits seeing as there are 5 firms and one of the condition of monopolistic competition is that there are a large number of firms. Would 5 be an alright number to go with in this case? I was thinking of changing of my question to 'To what extent are the internet service providers in Country X operating as an oligopoly?' But i'm wondering whether that would really be necessary and if it would be alright to carry on with my original question where I take the other market structures into consideration too. Reply Link to post Share on other sites More sharing options...
ctrls Posted August 3, 2014 Report Share Posted August 3, 2014 This would really depends on the country you are in, but ISP's in general are either an oligopoly or monopoly. The barriers to entry are huge because you need the cable infrastructure, plus 5 firms really isn't that many (for monopolistic competition think of bakeries, where there are likely hundreds in a country). In addition, some towns/cities may only have one ISP that reaches their area, in which case they would be a monopoly (this may not apply to your country, but this happens for example in the US and more rural areas/countries). By the sounds of things an oligopoly would probably be pretty accurate, though it's hard to say without specific information. While I don't know too much about the specifics of ISP's however, you probably will have to focus on just a single city because the available ISP's and pricing deals may differ. Reply Link to post Share on other sites More sharing options...
RevolutionToast Posted August 4, 2014 Author Report Share Posted August 4, 2014 This would really depends on the country you are in, but ISP's in general are either an oligopoly or monopoly. The barriers to entry are huge because you need the cable infrastructure, plus 5 firms really isn't that many (for monopolistic competition think of bakeries, where there are likely hundreds in a country). In addition, some towns/cities may only have one ISP that reaches their area, in which case they would be a monopoly (this may not apply to your country, but this happens for example in the US and more rural areas/countries). By the sounds of things an oligopoly would probably be pretty accurate, though it's hard to say without specific information. While I don't know too much about the specifics of ISP's however, you probably will have to focus on just a single city because the available ISP's and pricing deals may differ. Thanks a lot for the help! I suppose it would be wiser to change my question to 'To what extent does the market operate as an Oligopoly?'. Do you reckon it would be a good idea for me to focus on the Oligopolistic traits in my essay (collusive or non collusive) and towards the end state that it displays some traits of a monopolistic competition. Reply Link to post Share on other sites More sharing options...
ctrls Posted August 4, 2014 Report Share Posted August 4, 2014 Thanks a lot for the help! I suppose it would be wiser to change my question to 'To what extent does the market operate as an Oligopoly?'. Do you reckon it would be a good idea for me to focus on the Oligopolistic traits in my essay (collusive or non collusive) and towards the end state that it displays some traits of a monopolistic competition. I'm not too familiar with economics EE's so you're best asking someone else for the specifics, but it would depend on whether the ISP's in your area do form a collusive oligopoly or not - assuming that's what you are writing about. I'm not sure how you would find that out though, since I doubt they will openly tell you that they are colluding, if they area. Reply Link to post Share on other sites More sharing options...
RevolutionToast Posted August 4, 2014 Author Report Share Posted August 4, 2014 Thanks a lot for the help! I suppose it would be wiser to change my question to 'To what extent does the market operate as an Oligopoly?'. Do you reckon it would be a good idea for me to focus on the Oligopolistic traits in my essay (collusive or non collusive) and towards the end state that it displays some traits of a monopolistic competition. I'm not too familiar with economics EE's so you're best asking someone else for the specifics, but it would depend on whether the ISP's in your area do form a collusive oligopoly or not - assuming that's what you are writing about. I'm not sure how you would find that out though, since I doubt they will openly tell you that they are colluding, if they area. Yeah I doubt they're going to give that information out. I guess the only thing I could do is speculate since at the moment it seems like a non-collusive oligopoly going on with non price competition. Thanks a lot for the help Reply Link to post Share on other sites More sharing options...
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