Oligopoly - How It Works and Why It Works
7 Pages Posted: 12 Oct 2014 Last revised: 20 Jun 2019
Date Written: 2014
An oligopoly is a type of a market structure in which there are only a few producers. Oligopolies are prevalent in today’s reality. They are competitive: oligopolists compete with each other for sales, yet they are imperfectly competitive. They do compete for sales, but also possess some market power: the ability to raise market prices. Each oligopolist is not a monopolist, yet it can affect market prices; its decisions about how much to produce affect market prices. Product differentiation is also of utmost importance in oligopolies. In my paper I present the basic analysis of oligopolies.
Keywords: oligopoly, market power
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