Is Toys "R" Us, Inc. considered to be in a monopolistic competition or an oligopoly?

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kipling2448 | (Level 3) Educator Emeritus

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While Toys R Us may have once appeared on the verge of monopolizing the retail toy industry, it never really came close to achieving that status. Nor can one logically consider Toys R Us a part of a larger but still restrictive oligopoly. For Toys R Us to be considered to be part of either category, there would have to be serious limitations on the availability of merchandise due to a lack of competition, the prices of such merchandise would be manipulated, and there would be a record of predatory business practices on the part of this chain indicating that it sought to monopolize the industry or at least attain inordinate influence over it. With the prevalence of Wal-Mart, Target, KMart, and other large retailers in almost every community across the United States, to suggest that Toys R Us is a monopoly or part of an oligopoly would be a gross exaggeration. The fact is, with the proliferation of Wal-Marts and, to a lesser but still considerable degree, Target stores, the notion that Toys R Us, which has become almost an afterthought to most consumers, wields the kind of power within its industry terms like "monopoly" and "oligopoly" suggest is rather ludicrous. Additionally, there is no evidence that the above-mentioned rival chains collude to fix the prices of toys -- a serious omission if one is concerned about the rise of an oligopoly. And, not yet mentioned, the growth of Internet retailers like Amazon.com has served to further marginalize Toys R Us.

Basically, any suggestion that Toys R Us exists as either a monopoly or as part of an oligopoly ignores the extent of competition that exists in the retail toy sector. 

Three Conditions of an Oligopoly:
-There are only a few large sellers.
-Sellers offer identical or similar products.
-Other sellers cannot enter the market easily.

Three Conditions of a Monopoly:
-There is a single seller.
-No close substitute goods are available.
-Other sellers cannot enter the market easily.
(Ch.6 Market Structures, pceconomics.wikispaces.com)

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