oligopoly

  

Definition

Market situation between, and much more common than, perfect competition (having many suppliers) and monopoly (having only one supplier). In oligopolistic markets, independent suppliers (few in numbers and not necessarily acting in collusion) can effectively control the supply, and thus the price, thereby creating a seller's market. They offer largely similar products, differentiated mainly by heavy advertising and promotional expenditure, and can anticipate the effect of one another's marketing strategies. Examples include airline, automotive, banking, and petroleum markets. Mirror image of oligopsony.

Use oligopoly in a sentence

  • The beverage companies Coca-Cola and Pepsi are largely involved in an oligopoly because they sell very similar soda products which forces smaller beverage companies out of business.

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  • It is a fortuitous, influential, and powerful state indeed, the circumstance of being one of few select sellers within an oligopoly.

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  • The utility companies continued to wield their oligopoly power, raising prices without any noticeable improvement in service, knowing their customers had limited options

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