Answer1.

Yes I agree Indian cement industry shows a good example of oligopology examples to support the answers is as follows a)Number of firms: "Few" a "handful" of sellers. There are so few firms that the actions of one firm can influence the actions of the other firms. Like in Indian cement industry only a few companies like aditya birla group and holcim group control over 40% of cement market share. b) Interdependence: The distinctive feature of an oligopoly is interdependence. Oligopolies are typically composed of a few large firms. Each firm is so large that its actions affect market conditions. Therefore the competing firms will be aware of a firm's market actions and will respond appropriately. This means that in contemplating a market action, a firm must take into consideration the possible reactions of all competing firms and the firm's countermoves. It is very much like a game of chess or pool in which a player must anticipate a whole sequence of moves and countermoves in determining how to achieve his objectives. For example, an oligopoly considering a price reduction may wish to estimate the likelihood that competing firms would also lower their prices and possibly trigger a ruinous price war. Or if the firm is considering a price increase, it may want to know whether other firms will also increase prices or hold existing prices constant. This high degree of interdependence and need to be aware of what the other guy is doing or might do is to be contrasted with lack of interdependence in other market structure. In the case for example when in 1989 cement industry was deregulated all the players increased the prices of cement bags and all the players begin to increase production capacity owing to each other decision of doing so

Long run profits: Oligopolies can retain long run abnormal profits. High barriers of entry prevent sideline firms from entering market to capture excess profits. Like given in case in 1989 ROCE increased more than 26% due to burst in prices which is doing good till now and companies are deciding to increase production capacity Ability to set price: Oligopolies are price setters rather than price takers Like given in case after being decontrolled and de licensed prices of cement bags have increased from around 150rs to around 250 rs in 2007 all the cost have been passed on to consumers even then the product or the industry is doing good so the players are the price setters not price takers Profit maximisation conditions: An oligopoly maximises all profits. Like in case we see that the main motive of cement manufacturing firms is to generate profits Seeing all these points we can say that cement industry is a good example of oligopology in india ANSWER2. 1989, the cement industry was considered to be prepared for free market competition, and all price and distribution controls on sale of cement were withdrawn. The system of freight pooling was abandoned and a subsidy scheme to ensure availability of cement at reasonable prices in remote and hilly regions of the country was worked out. The industry was then de-licensed in July 1991 under the Policy of economic liberalization. By removing all controls on the cement sector the government hoped to accelerate growth and induce further modernization and expansion investments. It was after this decontrol that the Indian cement industry moved towards

globalization, with increasing emphasis on the exports. The expansion of the industry was evident after the decontrol where capacity as well as production increased many fold. Growth was seen from 91 plants and 43 million tonnes of production in 1989-90 boosting to 132 plants and 161.66 million tonnes production in 2006-07 ALSO GIVEN IN CASE :- WHEN THE PRICES WERE DECONTROLLED THE PRICES INCREASED GRADUALLY FORM 150RS PER BAG TO 230 RS PER BAG 20% TO 25% FREIGHT COST WAS ALSO SHIFTED TO CUSTOMERS INSPITE OF ALL THIS ROCE REACHER 26% DUE TO BURST IN PRICES AND CAPACITY OF CEMENT PLANTS INCREASED AND STILL TE INDUSTRYU IS GROWING ANSWER 3. YES THERE IS POSSIBILITY OF CARTEL OR IMPLICIT COLLOSION IN THE CEMENT INDUSTRY EXAMPLE. THERE ARE VERY FEW PLAYERS IN INDUSRTY IF ALL OF THEM OIN HANDS AND SELL CEMENT AT A FIXED PRICE THEN THIR IS POSSIBILTY THAT SITUATION OF CARTEL OR IMPLICIT COLLUSION MIGHT EXIST