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 Form 3 Business Studies lessons on product markets

Meaning and features of Oligopoly market

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Answer Text:
- Oligopoly refers to a market where there are a few large firms in the industry which produce products that are very close substitute of each other.
Features of oligopoly.
(i) Few sellers – There are three or four (few) sellers.
(ii) They produce differentiated products – They produce almost similar products which are differentiated.
(iii) There is interdependence among the firm – None of the firms dominate the market in decision making.
(iv) There is restriction on the entry of the new firms – There are barriers to entry into the industry including control of resources, legal Hurdles etc.