<p>This market is an oligopoly that is <em>subject to government regulation</em>. </p>

<p>It cannot be a monopoly because there is more than one firm. The presence of the regulating government body is a "red herring", it distracts from the main point- there are multiple firms. </p>

<p>It does not appear to be competitive because:</p>

<ul>
<li>Four is subjectively few firms</li>
<li>Implicitly, regulation would be entirely pointless in a competitive market.</li>
<li>One firm has managed to differentiate themselves by adding air conditioners. Firms in perfect competition cannot be differentiated from one another.</li>
</ul>

CC BY-SA 3.0
2016-03-16T06:52:20.470Z
Just a doubt: _regulation would be entirely pointless in a competitive market_, but don't you think that _Govt. intervention_ would have an effect on a competitive market? Like both pros and cons, depending on the policy?
Dawny33
CC BY-SA 3.0
2016-03-17T16:03:45.560Z
Yes.  Gov. Intervention could be irrelevant, so it's not a great indicator that a market is competitive. I included it more to point out a contrast between the two. Helpful government regulation can happen in oligopoly or monopoly setting. By contrast government regulation is not helpful for a competitive market.
RegressForward
CC BY-SA 3.0
2015-06-22T14:41:43.683Z
2015-06-28T17:03:02.090Z
2015-06-28T17:03:02.090Z
RegressForward
<p>There is a sense of differentiation thus this is not competitive market clearly. Government regulations in an industry cannot be regarded as a monopoly as government mostly will decide on a price ceiling or floor and not the quantity of transport supplied. Since there are only 4 firms this is an oligopoly clearly. They can collude to restrict output and raise prices if it is within the limits set by government. Maybe the government has set the price to actually prevent collusion.  </p>

CC BY-SA 3.0
2015-11-28T21:11:36.090Z
2015-11-28T21:11:36.090Z
Sub-Optimal
<p><em>Partial answer...</em> <br>
Transportation is an example of perfect substitute. If A increases the price, demand of A will decrease. Price is regulated by national body but no single firm can dominate the market alone. So this is not monopoly.</p>

CC BY-SA 3.0
2015-06-22T12:18:09.857Z
Perfect competition doesn't really describe the situation in OP's post either though, as this market structure usually assumes a homogeneous product, and OP's situation describes a market where there is some form of product differentation.
Hessian
CC BY-SA 3.0
2015-06-21T19:08:53.630Z
2015-06-21T19:44:57.013Z
2015-06-21T19:44:57.013Z
Mad Max
<p>As per the definition i found in the internet, </p>

<ul>
<li>Oligopoly, in which a market is run by a small number of firms that together control the majority of the market share. </li>
<li>Monopoly, where there is only one provider of a product or service.</li>
</ul>

<p>Consider this situation in a country.</p>

<p>There are 4 main bus operators in this country. A,B,C and D and some individual bus owners.</p>

<p>The bus fare is controlled by a national body.
Some particular bus owners  who has AC installed in the bus, charges a 0.2$ extra per route.</p>

<p>In the above scenario in what classification would you put the transport sector of this country. Is it a monopoly as the price is regulated by a single body? or is it an oligopoly as the market share is dominated by these four main company. </p>

<p>Further more for my upcoming exam if I get a question on Market structure of this country transport system how can I elaborate?</p>

CC BY-SA 3.0
2015-06-21T18:47:48.713Z
As long as fare revenues are collected by the individual firms, I'd say the market is an oligopoly, albeit a heavily regulated one.
Herr K.
CC BY-SA 3.0
2015-06-21T21:15:27.517Z
The ability to compete on margins other than the base fare (making A/C available and potentially competing on the price of benefits like A/C) is notable.
dismalscience
<microeconomics><monopoly><oligopoly>
Clarification about Market Structure Oligopoly or Monopoly
Rajneesh Kumar Gobin
# Clarification about Market Structure Oligopoly or Monopoly

(Asked by: username_0 on 2015-06-21)

As per the definition i found in the internet,

* Oligopoly, in which a market is run by a small number of firms that together control the majority of the market share.
* Monopoly, where there is only one provider of a product or service.

Consider this situation in a country.

There are 4 main bus operators in this country. A,B,C and D and some individual bus owners.

The bus fare is controlled by a national body.
Some particular bus owners who has AC installed in the bus, charges a 0.2$ extra per route.

In the above scenario in what classification would you put the transport sector of this country. Is it a monopoly as the price is regulated by a single body? or is it an oligopoly as the market share is dominated by these four main company.

Further more for my upcoming exam if I get a question on Market structure of this country transport system how can I elaborate?

**Tags:** microeconomics, monopoly, oligopoly
> **Comments:**
> **username_1**: As long as fare revenues are collected by the individual firms, I'd say the market is an oligopoly, albeit a heavily regulated one.  
> **username_2**: The ability to compete on margins other than the base fare (making A/C available and potentially competing on the price of benefits like A/C) is notable.  

---

## 3 answers

### Answer by username_3 on 2015-06-22. Score: 3

This market is an oligopoly that is *subject to government regulation*.

It cannot be a monopoly because there is more than one firm. The presence of the regulating government body is a "red herring", it distracts from the main point- there are multiple firms.

It does not appear to be competitive because:

* Four is subjectively few firms
* Implicitly, regulation would be entirely pointless in a competitive market.
* One firm has managed to differentiate themselves by adding air conditioners. Firms in perfect competition cannot be differentiated from one another.

> **Comments:**
> **username_4**: Just a doubt: _regulation would be entirely pointless in a competitive market_, but don't you think that _Govt. intervention_ would have an effect on a competitive market? Like both pros and cons, depending on the policy?  
> **username_3**: Yes.  Gov. Intervention could be irrelevant, so it's not a great indicator that a market is competitive. I included it more to point out a contrast between the two. Helpful government regulation can happen in oligopoly or monopoly setting. By contrast government regulation is not helpful for a competitive market.  

---

### Answer by username_5 on 2015-11-28. Score: 2

There is a sense of differentiation thus this is not competitive market clearly. Government regulations in an industry cannot be regarded as a monopoly as government mostly will decide on a price ceiling or floor and not the quantity of transport supplied. Since there are only 4 firms this is an oligopoly clearly. They can collude to restrict output and raise prices if it is within the limits set by government. Maybe the government has set the price to actually prevent collusion.


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### Answer by username_6 on 2015-06-21. Score: 0

*Partial answer...*   
Transportation is an example of perfect substitute. If A increases the price, demand of A will decrease. Price is regulated by national body but no single firm can dominate the market alone. So this is not monopoly.

> **Comments:**
> **username_7**: Perfect competition doesn't really describe the situation in OP's post either though, as this market structure usually assumes a homogeneous product, and OP's situation describes a market where there is some form of product differentation.  

---

