Editing Imperfect competition (section)

=== Oligopoly ===
{{Main|Oligopoly}}

In an oligopoly market structure, the market is supplied by a small number of firms (more than 2). Moreover, there are so few firms that the actions of one firm can influence the actions of the other firms. Due to the small number of sellers in the market, any adjustment of product quantity and pricing by an enterprise will affect its competitors and thus affect the supply and pricing of the whole market. Oligopolies generally rely on non-price weapons, such as advertising or changes in product characteristics. Several large companies hold large market shares in industrial production, each facing a downward sloping demand, and the industry is often characterized by extensive non-price competition. The oligopoly considers price cuts to be a dangerous strategy. Businesses depend on each other. Under this market structure, the differentiation of products may or may not exist.<ref>{{cite web |title=3 Different Forms of Imperfect Competition |url=http://www.economicsdiscussion.net/imperfect-competition/forms/3-different-forms-of-imperfect-competition-market-situation/13773 |website=Economics discussion |date=16 November 2015 |publisher=Saqib Shaikh |access-date=1 April 2020}}</ref> The product they sell may or may not be differentiated and there are barriers to entry: natural, cost, market size or dissuasive strategies.

In an oligopoly, barriers to market entry and exit are high. The major barriers are:

* [[Patents]]; 
* Technology;
* [[Economies of scale]];
* Government regulation (e.g. limiting the issuance of licences); and 
* Firm name recognition.<ref name=kifle6>Kifle, T. (2020). Lecture 6: Competitors and Competition (Part II) [PowerPoint Slides] . Unpublished Manuscript, ECON2410, University of Queensland, St Lucia, Australia.</ref>