Competition oligopolistic

Even in an ideal situation in which the doctor is a perfect agent for the patient, the need to regulate prices in the pharmaceutical market may arise from insufficient or very weak competition owing to the temporary market power of the manufacturers, the oligopolistic nature of many therapeutic submarkets, low elasticity of demand and imperfect prescriber information.1... 

On the supply side, patents allow the innovating company considerable discretion in pricing their new products. However, new products may be complements or substitutes of those of rival companies. In reality, pharmaceutical firms operate in oligopolistic markets characterized by a limited number of competitors (especially in submarkets such as that of cardiovascular products, for example), differentiated products and competitive innovation strategies. 

Table 3 presents a summary of the changes in total companies profits due to emissions trading under two scenarios perfect competition (PC) and oligopolistic competition, i.e. strategic behaviour by the major power producers (ST). These ET-induced profit changes can be divided into the following two categories. 

Oligopolistic competition (ST) Total profits Change Price effects in profits due to Free allocation Total change in profits... 

PC and ST refer to two different model scenarios, i.e. perfect competition (PC) and oligopolistic (or strategic) competition (ST). Numbers attached to these abbreviations, such as PCO or PC20, indicate a scenario without emissions trading (C02 price is 0) versus a scenario with emissions trading (at a price of 20/tCO2). The additions ze and le refer to a zero price elasticity and low price elasticity (0.1), respectively, compared with the baseline scenario with a price elasticity of 0.2. 

Oligopoly. Many CPI products are produced in an oligopolistic situation. Often, three or four firms produce over 50% of a chemical. The oligopoly has a set of characteristics that are not as easily defined as for perfect competition or monopoly. 

An industry is dominated by a monopoly or a few oligopolistic firms where outputs are reduced and prices are higher than competitive markets. 

Market structure advantage The large number of local producers spur competition and maintain a constant flow of innovations. In Malaysia more than 100 small firms operate in the hair care sector. As a result, the variety of products is much higher and the discovery of new consumer trends is more likely in these countries than in the oligopolistic markets in Europe, the United States and Japcin. A few large firms dominate the personal care business and the consumer distribu-... 

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