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Why do so many international markets tend towards oligopolist structure?
Definition of oligopoly - few and large firms with market power
a) Advantages of scale (LRAC diagram)
b) New markets - enhanced revenue/profits
c) spread of technology - firms will gain technological edge by merging or acquiring other firms
d) International firms will have access to foreign capital and lower cost factors of production
e) input from foreign markets can advantage the firm elsewhere, i.e. new tastes and preferences can permit the firm to transfer this knowledge to other markets
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RATIONAL EXPECTATIONS AND ECONOMIC THEORY : Much of undergraduate macroeconomic theory is discussed on the assumption that, in the short run, the expectations of economic age
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Diseconomies of Scale A rises in a firm's cost of producing an additional unit as all another factors of production rising. Diseconomies of scale can be caused by poor and ine
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