Nosharwan Khalid

12-arid-2546
SUBMITTED TO: DR. MUHAMMAD RAZZAQ
SUBJECT: ECONOMIC
TOPIC: OLIGOPOLY

OLIGOPOLY
(few sellers)
A situation in which a particular market is controlled
by a small group of firms.
An oligopoly is much like a monopoly, in which only
one company exerts control over most of a market. In
an oligopoly, there are at least two firms controlling
the market.
PRICE WAR There are few sellers, each firm is likely to
be aware of the actions of others.

BARRIERS TO ENTRY
Economies of scale may exist due to technology and
market share.
The capital investment requirement may be very
large.
Other barriers to entry may exist:

Control of raw materials

Retaliatory pricing

Substantial advertising budgets

Traditional brand loyalty

MONOPOLY VS
OLIGOPOLY
Meaning:

Prices:

Characteristics:

Monopoly

Oligopoly

where one seller dominates

the

where numerous sellers have

their

entire market.
High prices may be charged
since

presence in one single

market.
fair pricing due to
competition in market.

there is no competition
A single firm controls a large
market

These firms compete with

each

share in the industry, thereby other based on price,

gaining
customer
the ability to set price.
Barriers to entry: A monopoly usually exists

service etc.
Barriers to entry are very