Read full document

oligopoly

Page 1 of 5
+ http://www.expertsmind.com/course-help/?p=oligopoly-emergence-causes-98734287402

Oligopoly
Meaning:- Oligopoly is a common economic system in today’s society. The word “oligopoly” comes from the Greek “oligos” meaning "little or small” and “polein” meaning “to sell.” When “oligos” is used in the plural, it means “few.” Oligopoly is a market structure in which there are a few sellers and they sell almost identical products. A situation in which a particular market is controlled by a small group of firms. An oligopoly is much like a monopoly, in which only one company exerts control over most of a market. In an oligopoly, there are at least two firms controlling the market. There are barriers to entry in oligopoly. Oligopoly is characterized by the tension between cooperation and self- interest among these sellers. It is a competition among few big sellers each one of them selling either homogenous or differentiated products. 2 For example:- If the oligopolist firms can cooperate, they can charge a high price and share profits. But if they cannot cooperate and instead they compete because of following their own self-interest, then price goes down and profits decline. In

dustries which are examples of oligopolies include:
Steel industry
Aluminum
Film
Television
Cell phone
Gas
Telecom service providers
Internet service providers
Automobiles

DEFINITION
In the words of Mansfield “Oligopoly is a market structure characterized by a small number of firms and a great deal of interdependence.” In the words of P.C. Dooley, “ An oligopoly is a market of only a few sellers , offering either homogenous or differentiated products. There are so few sellers that they recognize their mutual dependence.”

Features
The important features of oligopoly are given as follow :
1. Few Sellers
2. Homogeneous or differentiated products
3. Entry is possible...