Oligopolistic competition

THE TERM OLIGOPOLY IS DERIVED FROM TWO GREEK WORDS.

• “OLIGI” WHICH MEANS FEW “POLIEN” MEANS TO SELL .
• IT IS A COMPETITION BETWEEN TWO BIG SELLERS EACH ONE OF THEM SELLING EITHER HOMOGENEOUS OR
DIFFERENTIATED PRODUCTS.

“OLIGOPOLY IS ALSO OFTEN REFERRED TO AS “COMPETITION AMONG THE FEW”

•OLIGOPOLY IS A PARTICULAR MARKET WHICH IS CONTROLLED BY A SMALL GROUP OF FIRMS .

CHARACTERISTICS OF AN OLIGOPOLY MARKET
FEW SELLERS OFFERING SIMILAR OR IDENTICAL PRODUCTS
INTERDEPENDENT FIRMS
BEST OFF COOPERATING AND ACTING LIKE A MONOPOLIST BY PRODUCING A SMALL QUANTITY OF OUTPUT
AND CHARGING A PRICE ABOVE MARGINAL COST

OLIGOPOLISTIC C OMPETITION
IT IS A SITUATION WHERE OLIGOPOLY DESCRIBES A MARKET DOMINATED BY FEW LARGE FIRMS
EXAMPLES: SOFT DRINKS CARS MUSIC