What is an oligopoly?

An oligopoly is a market which is dominated by a small number of firms. With a small number of firms in the market there is less competition between firms and therefore prices are unlikely to be best for the consumer. In some cases irms in an oligopoly may collude to raise prices, rely on there market domination to ensure there is no other alternative for consumers to buy therefore they have to pay the higher price. Oligopolies are not necessarily anti competitive however. For example the supermarket trade in the UK is dominated by the big four (sainsbury's,Morrison's, Tesco and Asda.) but they are constantly pushing prices down in order to increase their market share.

AB
Answered by Archie B. Economics tutor

2671 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

What are the two different types of circular flow of income models?


How can you calculate the Price and Quantity at a market equilibrium given the Demand curve P = 20 - Q and the Supply curve P = 3Q


Explain why a government budget deficit is likely to stimulate economic growth.


Discuss the factors causing the demand for the iPhone to shift to the right.


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences