Characteristics of Oligopolistic Markets
- An oligopoly is a market structure in which a few large firms dominate the industry with each firm having significant market power and the concentration ratio of the top 5 firms is usually high
- E.g. Banks, insurance companies, department stores, supermarkets, petrol retailers, sport stores etc.
Diagram: The Level of Market Power in an Oligopoly
Firms in an oligopoly market experience a higher degree of market power and the market share is more concentrated
Characteristics of an Oligopoly Market
High Barriers to Entry & Exit |
High Concentration Ratio |
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Interdependence of Firms |
Product Differentiation |
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