Market Oligopoly Theory

Market oligopoly theory refers to a market structure where a small number of firms dominate the industry. These firms hold significant market power, which means their decisions on pricing and production can significantly impact one another. In an oligopoly, companies often engage in strategic behaviors, such as setting prices together or responding to each other's moves to maintain their market positions. This competition can lead to higher prices and less innovation compared to more competitive markets. Examples of oligopolies include industries like telecommunications or automobile manufacturing, where a few large players control the majority of the market.