An oligopoly market usually is dominated by a few large suppliers and there are significant barriers to entry. Game theory is best used to understand an oligopoly market as it studies the relationship between market participants when companies make business decisions such as pricing, levels of production, investment in R&Ds etc.

Option (a) is incorrect because when there are few players in the market, the concentration ratio determines the total output produced by a given number of firms in the industry.

Option (b) is incorrect because inter industry competition is ruled out in oligopoly market as there are significant barriers to entry.

Option (d) is incorrect because Herfindahl index measures the market share of each firm competing in a market.

The political and financial risk that a company faces by conducting business in a foreign location is a type of country risk. These are types of risk that are related to the particular country where the business is being carried out.

Option (b) is incorrect because principal risk is the risk of losing the principal amount due to non-payment by the borrower.

Option (c) is incorrect because interest rate risk is the risk assigned to the changes in interest rates.

Option (d) is incorrect because commodity price risk arises from the fluctuations in the prices of commodity.

An oligopoly is a highly concentrated market where only a few firms dominate. Any change by one firm has a direct impact on the performance of the products of the other firms in the market. Thus, it is characterized by adaption to changes in price and volume while striving to maintain product differentiation through advertising and ensure market share.

Option (a) is incorrect because being responsive to market sales price in order to maintain market share is a characteristic of perfect competition.

Option (b) is incorrect because enhancement of a product’s unique selling point and maintenance of market share are characteristics of a monopolistic competition.

Option (d) is incorrect because maximization of profits from profitable production levels applies more closely to a monopoly rather than oligopoly.

Respond to market conditions related to sales price and maintain market share.

Absence of price control or non-price competition i.e. advertising etc.

In pure competition, the number of sellers is that large that no firm can affect the price and the market. The firms are the price takers and have relatively small market share. As the products sold are identical, one seller cannot sell something better or something different than another seller e.g. agriculture products like wheat, soybean, corn etc. As a result, it becomes essential for the firms operating under pure competition market conditions to adapt to the changing market conditions related to the sales price to maintain their market share.

In a perfect competition, at all production levels marginal revenue (MR) equals price. This is because the demand curve is horizontal.The firm supplies as long as MR exceeds MC (marginal cost) until the point where MR = MC

The market demand curve is downwards sloping. The demand will increase at reduced prices (and vice-versa). If suppliers earn economic profits, in the long run, new suppliers enter the market (given no barriers to entry) until prices fall and it is possible to only earn a normal profit. Also if suppliers earn economic losses, in the long run, suppliers will exit the market until prices rise and a normal profit is earned by the most efficient suppliers.

In the case of perfect competition all the firms sell a virtually identical product. Firms attempt to be the lowest cost producer in the marketplace. Needless to say, advertising will be non-existent.

Strategic alliances are collaborative arrangements between two or more firms which may be organized as joint ventures, equity ventures or simple agreements (like co-development or co-marketing agreements). Codevelopment agreements are strategic alliances that involve collaboration between two or more firms. This is an example of the same.

I) The analysis can be carried out for a product, place, company, industry or a person.

II) It analyses the key internal and external factors integral to achieving an objective.

III) Opportunities and threats are viewed as unfavorable external factors that might affect an organization.

IV) An inadequate supply network or lack of capital is an example of threat.

SWOT analysis is a study of the internal strengths and opportunities as well as external weaknesses and threats existing in an organization to better understand the position and capabilities. The study can be carried out on any product, place, industry, company or person and involves examining the key internal and external factors essential for attaining the objectives of the organization. Threats are considered as unfavorable external factors, but opportunities are favorable external resources and capacity. An inadequate supply network or lack of capital is an example of weakness and not of threat.