Disadvantages of oligopoly

Answer 1

1. Cartel: A cartel is when a group of firms decide to agree on leveling out the output. In some countries, output supply needed might be more than other countries or more than the specified output level. Thus, it might be a problem in some countries.

2. Collusions: Collusions are informal agreements done between firms in an oligopoly to ristrict competition. Thus, new firms my not be able to set up and this may cause dificiency of choice for customers.

Answer 2

The disadvantages of oligopoly include unrealistic setting of prices. It also fails to establish the market because most of it are captured by larger firms.