Microecons Project on Oligopoly

Published: 2021-09-10 16:05:09
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Category: Business

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.Introduction to Singapore Taxi Operators
There is a total number of seven Singapore Taxi Operators in Singapore. They are the Yellow-Top-Taxi, Prime Taxi, Premier Taxis, SMRT Taxis, Smart Taxis, Trans-Cab and CityCab & Comfort Taxi (under one company, called ComfortDelgro). Taxis make up one of the core transportation in Singapore, with a total number of about 26,000 taxis in Singapore. All Singapore cabs are registered with big companies that are given license to run the business by Singapore government. The biggest Taxi Operator is Comfort Delgro with a fleet of more than 15,000 taxis. While the smallest Taxi Operator is Prime Taxi with only a fleet of only about 350 taxis. As this is a small market, competition is not very big as others taxi operators will follow the price set by the dominant taxi operator which is Comfort Delgro. Singapore taxi operators revenue is about $1.5 billion a year.
Introduction to Comfort Delgro
Established in 1970, Comfort Transportation ( Comfort) was then known as the Workers'Co-operative Commonwealth for Transport Limited with the aim to provide taxi drivers with a profession and a better life. From its humble beginnings of 1000 Morris Oxford taxis to its present fleet of over 10,000 taxis. Comfort has grown to become the larger of the two taxi companies that ComfortDelgro has.
1.Type of market structure : Oligopoly
Singapore Taxi Operators have an Oligopoly market structure in the industry as there are few large dominant firms. For example, ComfortDelgro is only the largest dominant firm among all the other taxi operators. The other taxi operators do not have much power to control the market as ComfortDelgro has more than half the total number of taxis in Singapore. Even if the other 6 taxis operators joined together, ComfortDelgro will still have more taxis than them.
Another example is that all taxi operators would be offering to ferry customers around Singapore or bring them from one place to another. However different taxi operators have different kinds of services. Such as ComfortDelgro which provides car rental & leasing, insurance broking services and vehicle inspection & technical testing services, but Prime Taxi does not have these services. Besides that, it is hard for a new taxi operator to come into the market as the market is already dominated by other bigger taxi operators.
Difference between Oligopoly and other market structures.
Oligopoly
* Few large dominant firms
* Differentiated product
* Difficult barriers to entry Monopolistic
* Many sellers
* Differentiated product
* Freedom of entry and exit
* Imperfect knowledge

Perfect Competition
* Large number of small firms
* A homogenous product
* Free entry and exit of firms
* Perfect knowledge
* Price taker Monopoly
* Single seller

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