Evaluating the Effectiveness of an Oligopoly Essay Example

Southwest Airlines is part of an oligopoly. An oligopoly is defined as an instance where there are only a small number of producers in a market; due to the small numbers, if one company changes their prices of their goods or services, the others will do the same in order to keep it competitive. Running as an oligopoly can be both helpful and painful for the consumer. For instance, Southwest Airlines has set prices they have for certain flights to certain locations. They will run these prices as long as they competitively can.

The price will differ slightly due to economic conditions, i. e. fuel costs, but for the most part, the only real variations show up during high travel times such as holidays. If Delta Airlines decides that they can cost effectively lower their prices for an identical flig