Question

Thinking of Verizon Wireless:

• Does the business operate in a market that is characterized by perfect competition, monopolistic competition, oligopoly, or pure monopoly? Explain how you drew your conclusion about its market structure.

Answer 1

Verizon wireless is characterised by oligopoly competition in the US market as Verizon along with three other telecom service provider control maximum market shares. This market will be considered as an oligopoly because there are few large firms in the market controlling most of the services,

These few firm are interdependent on each other for decision making, and a decrease in the price of one service provider will lead to a reduction in the price of the others as well, they are also considered as an oligopoly because there are some barriers to entry in the market especially economies of scale, the price at which these companies operate are rigid and doesn't fluctuate quickly.