Oligopoly meaning and characteristics

Oligopoly meaning and characteristics
Oligopoly meaning and characteristics

We have detail information of Oligopoly meaning and characteristics.

Oligopoly meaning and characteristics

Following are the detail information:


Oligopoly is a form of market structure where there are a few sellers and these few sellers have large market share. The sources of oligopoly are huge capital investment, control over the certain raw materials, economies of scale, patent right, merger and take over and so on.

Features or Characteristics of Oligopoly

1. A few sellers

2. Interdependence of decision making

3. Barriers to entry

4. Indeterminate price and output

5. Advertising and selling cost

6. Nature of the product

7. Price rigidity

Factors Causing Oligopoly

The main sources or factors causing oligopoly are as follows:

1. Huge capital investment

2. Economies of scale

3. Economies of scope

4. Patent rights

5. Barriers to entry

6. Merger and take over.

Types of Oligopoly

The various types of oligopoly are as follows:

1. Pure and differentiated oligopoly.

2. Open and closed oligopoly.

3. Collusive and non-collusive oligopoly.

4. Partial and full oligopoly.

5. Syndicated and organized oligopoly.


There are various models oligopoly which is presented as follows:

1.Collusive Oligopoly

a. Cartel

  • Cartel Aiming at Joint profit Maximizing
  • Market Sharing Cartel
  • Non-price Competition
  • Determination of Quota

b. Price Leadership

  • Price Leadership by Low Cost Firm
  • Price Leadership by Dominant Firm
  • Barometric Price Leadership

2. Non-collusive oligopoly

  • Kinked Demand Curve Model

Other Important Links:

a. Perfect competition markets with Examples: CLICK HERE

Other Important Links

Frequently Asked Question

a. What is oligopoly with example?

= Oligopoly market is a market in which there are few sellers of homogeneous or differentiated prouct in the market, there are larger number of buyers, firms have market power and there is high degree of rivalry among firms unless theyr make a collusive agreement.

Example of oligopoly

  • The global automobile industry
  • Mobile Phone Industry
  • Soft Drink Industry
  • Banking Sectors
  • Airline Industry

b. What are 4 feature or characteristics of oligopoly market?

= Following are the features or oligopoly market:

  • Small number of large firms.
  • Identical or differentiated products
  • Barriers to entry