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Advantages And Disadvantages Of Oligopoly

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The rising of Indonesian retail company such as Indomaret and Alfamark has become the pioneer of the retail company development in Indonesia. Even though the retail company in Indonesia is not only Indomaret and Alfamart, but it seems that these two companies has becoming the largest retail company in Indonesia based on the amount of its outlets all over Indonesia. As I stated before that the retail company in Indonesia is not only Indomaret and Alfamart. It automatically conclude that there is a pratical of ‘Oligopoly’ market system here where market consist of several seller and many consumer. The existing of Indomaret and Alfamart will slowly decrease the number of the consumer of traditional retail shops in Indonesia and I personaly think that it may cause any conflicts and problems according to each actors that involved. First thing first, like a two side of a coin, Oligopoly market system may have positive and negative impact, advantages and also disadvantages. But in respond to this condition, I will giving analysis regarding some disadvantages of Oligopoly market system and also give some suggestions to be able to solve the problem that may occur. Firstly, It may creates inequality of welfare distribution because of the oligopolist profits are very large and accepted on an ongoing basis. This condition could result in the inequality of welfare distribution. Since it is only composed of a few companies, the behavior of the company or every decisions/policy
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