Oligopoly Characteristics

Oligopoly is that market structure where only few sellers or producers dominate the entire industry, in oligopoly the number of seller or producer is more than 1 and that is why it is not same as monopoly. Example of oligopoly include airlines, even FMCG companies can be included in oligopoly because strategy of one company is dependent on the action of other rival company. Given below are some of the characteristics of oligopoly –

  1. In an oligopoly market structure there are only few companies but they are large when it comes to the size of the companies.
  2. Oligopoly is characterized by companies selling same goods and services or slightly differentiated goods and services to the customers.
  3. There are so few companies in an oligopoly that action of company influences the decision of other company, in other words there is interdependence between the companies in an oligopoly. So for example if one company decides to decrease the price of a product, then other companies in the market will follow the other company.
  4. There are some barriers to entry in oligopoly which helps the existing companies in earning abnormal profits. However barriers to entry are not that much as in the case of monopoly market structure.
0 comments… add one

Leave a Comment


Related pages


golden rules of accounts with examplesadvantages and disadvantages of mixed market economyexample of conglomerate integrationunearned revenue isdiversifiable risk and nondiversifiable riskadvantages and disadvantages of leadership styleswhat is the main difference between socialism and capitalismdistinguish between capitalism and socialismaccounting cost conceptcrossing the chequeeconomic system of socialismadvantages of authoritariandisadvantages of living in mexicofictitious assetprepaid accounting entrycapital account convertibilitynet worth calculation of a companydisadvantages of jitdefine securitizedtraditional economy country examplesconsignee consignorbill discounting definitionquota tariffsubvention meansdefine floating currencyexample of barter systemexamples of explicit costcharacteristics of forward contractadvantages of process costing systemfunds flow analysischaracteristics of forward contractstrengths and weaknesses of autocratic leadershipadvantages of the payback methodurbanization advantageswhat does proprietors meandecentralisation advantagesglobal warming advantages and disadvantagestrade discount accounting treatmenta trial balance is prepared tomerits and demerits of decentralizationcompetition based pricing advantages and disadvantagesmanagerial accounting relevant costs for decision makingwhat is trial balance & why it is prepareddisadvantages and advantages of command economywhen is a trial balance preparedwhen to use autocratic leadershipmerits of advertisementwhich of the following is a disadvantage of decentralizationcertificates of deposits in indiaadvantages and disadvantages of capital budgeting techniquesautocratic advantagesexample of unqualified audit reportdisadvantages of capitalist economywhat does the word consignment meanwhat is cost concept in accountingdiminishing balance method of depreciationjit disadvantageswhat is bartering systemcrr and slr meaningmarginal costing formatfictitious assets examples wikipediadifference between bills receivable and accounts receivabledemat vs trading accountexample of prepaid expensecapital account journal entrysystematic and unsystematic risksprivate venture capital advantages and disadvantagesterm loan and overdraftdisadvantages of job costinghow to calculate cash reserve ratiocharacteristics of forward contractlaw of diminishing return in economicsadvantages of conglomerateswhat is unbilled revenuecapm model assumptionscosts of deflationexamples of substitutes in economics