The main characteristics of oligopolistic markets
An oligopoly is a market dominated by a small number of large firms. Each firm watches its rivals closely, because any decision one firm makes will affect the others.
Real World
The UK supermarket sector — dominated by Tesco, Sainsbury's, Asda, and Morrisons — shows classic oligopoly: each chain monitors rivals' price changes and promotions before responding with their own.
Exam Focus
Always mention interdependence when discussing oligopoly behaviour; it is the central distinguishing feature examiners look for.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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