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Define Oligopoly and its characteristics

Explain the term Oligopoly? Also explain its Characteristics?

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A market where the supply is controlled by a small group of companies called as Oligopoly . In this situation, the actions of one company will have a material effect on the entire market for a product.

Characteristics of an Oligopoly are:

i) Substantial barriers to entry

ii) Market dominated by a few large firms

iii) Different products

iv) Price rigidityAn example of this type of monopoly would be the corporations Visa and MasterCard. These are in the business of card securities and hold major market share. However, it could be noted that Visa holds more of a pure monopoly status; MasterCard does have a high level of control to create a competitive market situation.

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