Competition is limited in an oligopoly because a small number of firms dominate the market, leading to interdependence among them. Each firm is acutely aware of the actions and reactions of its competitors, which discourages aggressive price cuts or innovations that could provoke a price war. Additionally, barriers to entry, such as high startup costs and brand loyalty, prevent new competitors from entering the market, maintaining the status quo among the existing firms. This results in a market structure where firms often engage in non-price competition, such as marketing and product differentiation, rather than competing primarily on price.
the difference between perfect and imperfect oligopoly
monopolistic competition
oligopoly, monopoly, and pure competitonMonopoly, Pure competition, Oligopoly
Oligopoly. Few or top producers, around 60% of the market.
Oligopoly
Perfect Competition, Monopoly, Monopolistic Competition or Oligopoly
the difference between perfect and imperfect oligopoly
Pure Competition Monopolistic Competition Oligopoly Monopoly
monopolistic competition
oligopoly, monopoly, and pure competitonMonopoly, Pure competition, Oligopoly
Oligopoly. Few or top producers, around 60% of the market.
Oligopoly
oligopoly
An oligopoly is an intermediate market structure between the extremes of perfect competition and monopoly. Oligopoly firms might compete (noncooperative oligopoly) or cooperate (cooperative oligopoly) in the Marketplace.
Monopoly, Oligopoly, and monopolistic competition.
Oligopoly, Pure competition, Monopolistic competition
The auto industry oligopoly limits consumer choice by reducing the number of competitors, leading to less variety and potentially higher prices. Competition is also limited as the few dominant firms may collude rather than compete aggressively.