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An '''oligopoly''' is a [[market]] with only a few sellers, who enjoy [[Barrier to entry|barriers to entry]] against new [[competitor]]s. An oligopoly lacks full [[competition]] and [[consumer]]s may suffer as a result.
An '''oligopoly''' is a [[market]] with only a few sellers, who enjoy [[Barrier to entry|barriers to entry]] against new [[competitor]]s. An oligopoly lacks full [[competition]] and [[consumer]]s may suffer as a result.
Described another way, an oligopoly is an [[industry]] or market dominated by a only few firms selling a similar (undifferentiated) product. This is called a "perfect oligopoly." The few firms can behave in a harmful manner similar to how a [[monopoly]] behaves in overcharging customers or otherwise suppressing beneficial competition, since a low number of dominant actors in the market makes it relatively easy for them to collude and form a [[cartel]].
Described another way, an oligopoly is an [[industry]] or market dominated by only a few firms selling a similar (undifferentiated) product. This is called a "perfect oligopoly." The few firms can behave in a harmful manner similar to how a [[monopoly]] behaves in overcharging customers or otherwise suppressing beneficial competition, since a low number of dominant actors in the market makes it relatively easy for them to collude and form a [[cartel]].
Even if there is no collusion, the lack of competion may cause price to rise above marginal cost, where it would be if there were more firms, as competion forces prices down as firms undercut each other.
Even if there is no collusion, the lack of competition may cause price to rise above marginal cost, where it would be if there were more firms, as competition forces prices down as firms undercut each other.
An imperfect oligopoly consists of a few firms in an industry or market, but their product is differentiated, as in the car industry.
An imperfect oligopoly consists of a few firms in an industry or market, but their product is differentiated, as in the car industry.