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.