MGTA01H3 Study Guide - American Psychologist, Discouraged Worker, Nuclear Engineering
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MGTA03 - INTRODUCTION TO MANAGEMENT I
2011 Winter – Mid-Term Test – March 12th, 2011
Model Answers to SAQs
Identify the degree of competition of the cell phone industry in Canada. 1 mark
The Canadian cell phone industry is an Oligopoly 1 mark
Explain and justify your answer by identify at least three features of this degree
of competition, and relate these features to the cell phone industry in Canada 3 marks
We can say that is an oligopoly because the industry has the following
1) A small number of suppliers (3 main providers Rogers, Bell, Telus =
95% of all subscribers) dominates the industry
2) Each of the few cell phone companies is "large", i.e. large in terms of
volume of sales, number of employees, number of customers, etc.
3) There are only a few suppliers because there are barriers to entry: large
4) There are economies of scale, i.e. the huge costs of installing a network
can be lowered on a per-customer basis if you have very many subscribers.
5) The competitors watch each others' pricing policies closely, and tend to
match each others' price changes and marketing initiatives, quickly..
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