A number of recent studies show that Canadians are paying the highest prices for cellphone service in the world.1Critics of the Canadian cell service industry attribute high prices to having a market largely dominated by only a few companies.The industry is an oligopoly and is therefore an imperfectly competitive business. This results in consumers having to pay higher prices than those in more competitive jurisdictions with more suppliers or where prices are subject to regulation by government. To support their argument, critics also point to the fact that the Canadian cellphone market has a comparatively low level of penetration which is directly attributable to the lack of affordability of such service here.

Based on what you have learned about oligopolies, do you think that the high price of cell services is a result of oligopoly influence? Explain your thinking using information from the course and your own research.