An oligopoly is a market where a small number of sellers dominate.
In Australia, it is clear that the supermarkets are an oligopolistic market. Coles and Woolworths clearly control a huge market share of the Australian market.
Another factor that further confirms this is that when Coles or Woolworths decreases their prices or have promotions, the other will follow suit. This is because with the higher price, it is bound to lose some market share to the competitor.
A recent scenario is where Woolworths offers a 10 cents off petrol prices per litre whenever you shop over a certain amount at Woolworths and spend at an affiliated petrol station. Soon after Coles follow suit.
In Australia, it is clear that the supermarkets are an oligopolistic market. Coles and Woolworths clearly control a huge market share of the Australian market.
Another factor that further confirms this is that when Coles or Woolworths decreases their prices or have promotions, the other will follow suit. This is because with the higher price, it is bound to lose some market share to the competitor.
A recent scenario is where Woolworths offers a 10 cents off petrol prices per litre whenever you shop over a certain amount at Woolworths and spend at an affiliated petrol station. Soon after Coles follow suit.
