Difference between revisions of "Oligopoly"
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| − | An oligopoly is a seller's market having only a few sellers, who enjoy barriers to entry against new | + | An '''oligopoly''' is a seller's [[market]] having only a few sellers, who enjoy [[Barrier to entry|barriers to entry]] against new [[competitor]]s. An oligopoly lacks full [[competition]] and [[consumer]]s 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. | + | 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. |
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. | ||
| − | An example of an oligopoly is the market for car or health insurance in most states. | + | An example of an oligopoly is the market for [[Auto insurance|car]] or [[health insurance]] in most states. |
Revision as of 01:07, May 6, 2007
An oligopoly is a seller's market having only a few sellers, who enjoy barriers to entry against new competitors. An oligopoly lacks full competition and consumers 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.
An imperfect oligopoly consists of a few firms in an industry or market, but their product is differentiated, as in the car industry.
An example of an oligopoly is the market for car or health insurance in most states.
