The most general definition describes oligopoly as a specific type of market characterized by imperfect competition. The peculiarity of economic regulation in the conditions of oligopoly is that any of the companies has the ability to influence pricing.
The market oligopoly is close to monopoly, although it has some mechanisms similar to competition. The point is not only that in the monopolistic market there is little competition between the few sellers, who usually are no more than ten, such a market usually acts as a closed system and does not let new participants in. As an example, we can recall the Russian market of mobile operators.
Features of oligopoly
You can recognize the oligopolistic market by the following characteristic features:
- there are a small number of firms on the market, but there is a great demand - this is a market supply that these firms sell to smaller users
- the products of such firms can be standardized or differentiated;
- in such a market there are serious barriers to entry of new firms;
- manufacturers are dependent on each other, so there is price control.
