foxex: What is an 'Oligopoly'?

Sunday, November 17, 2019

What is an 'Oligopoly'?

Oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. The concentration ratio measures the market share of the largest firms. A monopoly is one firm, duopoly is two firms and oligopoly is two or more firms. There is no precise upper limit to the number of firms in an oligopoly, but the number must be low enough that the actions of one firm significantly influence the others.

Related to "Oligopoly"

Monopoly vs. Oligopoly: What's the Difference?

Learn the difference between a monopoly and an oligopoly, both being economic market structures where there is imperfect competition in the market.

What are Current Examples of Oligopolies?

An oligopoly consists of a select few companies having significant influence over an industry. Industries like oil & gas, airline, mass media, auto, and telecom are all examples of oligopolies.

Perfect vs. Imperfect Competition: What's the Difference?

Perfect competition is a concept in microeconomics that describes a market structure controlled entirely by market forces. If and when these forces are not met, the market is said to have imperfect competition.

Related Definitions

Monopoly

A monopoly occurs when a company and its offerings dominate an industry. Although many monopolies are illegal, some are government sanctioned.

Cartel

A cartel is an organization created from a formal agreement between a group of producers of a good or service to regulate supply to manipulate prices.

Collusion

Collusion is an agreement between entities or individuals working together to influence a market or pricing for their own advantage.

Perfect Competition

Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and resource mobility are met.