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What Is The Difference Between An Oligopoly And A Monopoly?

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Tariq Habib Profile
Tariq Habib answered
How imperfect can imperfect competition get? The most extreme case is monopoly: a single seller with complete control over an industry. It is only firm producing in its industry, and there is no industry producing a close substitute.
True monopolies are rare today. Indeed, they typically exist only with some form of government protection. For example, a pharmaceutical company, which discovers a new wonder drug, will be granted a patent, which gives it monopoly control over that drug for a number of years. Another important example of monopoly is a franchised local utility, such as firm that provides your electricity or water. In such cases there is truly a single seller of a service with no close substitutes.
The term oligopoly means few sellers. Few in this context, can be a number as small as 2 or as large 10 or 15 firms. The important feature of oligopoly is that each individual firm can affect the market price. In the airline industry, the decision of a single airline to lower fares can set off a price war, which brings down the fares charged by all its competitors.
Anonymous Profile
Anonymous answered
A monopoly is one company controlling a certain market, such as the post office. An oligopoly is a few companies controlling a certain market, such as the car industry or the oil industry.A true duopoly is a specific type of oligopoly where only two producers exist in one market. In reality, this definition is generally used where only two firms have dominant control over a market. In the field of industrial organization, it is the most commonly studied form of oligopoly due to its simplicity.

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