what are the features of oligopoly - Economics - Market Equilibrium

Question

what are the features of oligopoly?

Vanita Rana · Accepted Answer

Features
of Oligopoly

1 
Few Large Firms- There exists few but large and
dominating firms These firms account for majority of market supply,
thereby control the market price and quantity of the output

2 
Mutual Dependence- There exists a very high degree of
mutual interdependence between the firms in an oligopoly market The
price and the quality decisions of a particular firm are dependent
on the price and the quality decisions of the rival (other) firms
Hence, a firm must take into consideration the probable rival
reactions, while formulating its own price and output decisions

3 
Restricted Entry- As there exists a cut-throat
competition among the firms, so it is very difficult for any new
firm to enter into the industry Moreover, as the existing firms are
the only giants in the market, so it narrows the scope for a new
entrant to enter the industry due to high cost associated with the
entry
4 
Product-
The products of any two oligopolistic firms can either be
homogeneous such as in a steel industry or can be differentiated
such as in an automobile industry
Also, these features are extensively covered in our study material
You can find them in Microeconomics-Non Competitive
Market (Lesson 3) of our study material