Oligopoly Competition

                               OLIGOPOLY

Oligopoly means- “few sellers”. An industry dominated by just a few firms. Three or four accounts for more than half the industry supply. Oligopoly is an important form of imperfect competition. Oligopoly markets are characterized by markets dominated by a small number of large firms.

Example- Industries like steel, automobiles, oil, cereals, cigarettes and operating systems software are oligopolistic.

Oligopoly has only a few firms, each one must consider the effect of its own actions on competitors behaviour. Oligopoly is independent. When producers of few sellers are homogeneous, we talk about Pure Oligopoly. On the other hand, when producers of few sellers are differentiated but close substitutes of each other, differentiated Oligopoly is said to prevail.