Provide a real-world example of a market that approximates each oligopoly setting, and explain your reasoning. a. Cournot oligopoly. b. Stackelberg oligopoly. c. Bertrand oligopoly.

a. Cournot oligopoly.

The largest and probably most powerful cartel in the world, the OPEC (Organization of the Petroleum Exporting Countries), is an example of a Cournot oligopoly. In a Cournot oligopoly, the competing firms decide how much output they will produce. In the case of OPEC, the competing countries decide total output.

b. Stackelberg oligopoly.

The smartphone industry is a clear example of a Stackelberg oligopoly where Apple is the leader and the rest follows. In a Stackelberg oligopoly, the leader establishes output and/or price decisions and the rest follow.

c. Bertrand oligopoly.

The soda industry is an example of a Bertrand oligopoly where Coke is the leader and Pepsi follows. Even thought they control around 70% of the soda markets, they continuously fight and compete against each other, This industry cannot be considered a Cournot oligopoly since price is a major factor in the competition.

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