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ECO511 - Economics for Business

   

Added on  2020-09-09

9 Pages2459 Words41 Views
ECO511 - Economics for BusinessAssignment 4: Essay QuestionStudent Name: Student Id:

Table of ContentsIntroduction......................................................................................................................................2Analysis...........................................................................................................................................3Theory of non-collusive oligopoly..............................................................................................3Issues faced in Australian banking sector........................................................................................3Evidences related to Australian banking sector...............................................................................4Evaluation of the situation based on theory.....................................................................................5Conclusion.......................................................................................................................................7References........................................................................................................................................8List of figure: Figure 1: Non-collusive Oligopoly Market (Kinked Demand Curve).............................................61

Introduction The studies have indicated the fact that the four major banks ANZ Bank, Westpac, NationalAustralia Bank and Commonwealth Bank of Australia are assumed to control around 75% of themarket share. In fact, the banks are also expected to experience lower funding costs as comparedto small rivals (Bakir,2019). It has also been pointed out that financial technology professionalshave not been mature enough to deal with the issue of competition among the large and smallbanks. The power of each of the larger banks needs to be reviewed in order to take control of thecompetitive scenario. The situation can be evaluated on the basis of the non-collusive oligopolytheory and evidence about the situation would be gathered from various media reports (Apergis& Cooray,2015). The aim of the research is to suggest a suitable strategy so that the Australianbanks are able to operate as independent entities and they are able to serve large number ofcustomers. The research also has the scope to relate the theory with that of the scenario so thatthe performance of each of the banks can be measured despite the competition. 2

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