Features of the oligopoly market structure

Features of the oligopoly market structure

• Has few large sellers and many buyers.
• The firms are interdependent among themselves especially in their output and pricing.
• Non-price competition, firms are in a position to influence the prices. However, they try to avoid price competition for the fear of price war.
• There is barriers to entry of firms due to reasons such as; requirement of large capital, Ownership of production rights, control over crucial raw materials,  Restrictive practices etc
• High cost of selling through methods of advertisement due to severe competition.
• Products produced are either homogeneous or differentiated.
• Uncertain demand curve due to the inter-dependence among the firms. Hence the shifting of the demand curve is not definite.
• There is price rigidity i.e. once a price has been arrived at in an oligopolistic market, it tends to remain stable.

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