Oligopoly
Oligopoly is a market structure characterised by: few dominant firms (typically 2-10) controlling large market shares, high barriers to entry and exit, product differentiation, and interdependent firm behaviour where decisions of one firm significantly affect others.
Real World
The UK supermarket sector, dominated by Tesco, Sainsbury's, Asda, and Morrisons holding roughly 65% of grocery sales, exemplifies oligopoly — price wars and loyalty card schemes reflect the intense interdependence that characterises the structure.
Exam Focus
Always apply the kinked demand curve model to explain price rigidity; examiners reward explicit reference to the asymmetric elasticity above and below the prevailing price.
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