What distinguishes oligopoly from monopoly fro monopolistic

What distinguishes oligopoly from monopoly fro monopolistic competition? An oligopolist explicitly takes into account competiors\' reactions to its output and prioing decisions, whereas a monopolistic

Solution

Sol:- An oligopolist faces barriers to entry where as Monopolist donot

An oligopoly market has a small number of relatively large firms that produce similar but slightly different products. Again, there are significant barriers to entry for other enterprises. In a monopoly, the seller charges high prices for the goods because there is no competition.

Characteristics of Oligopoly:

The three important characteristics that can be discussed are--

1.Small Number of Large Firms

2.Identical or Differentiate Products

3.Barriers to Entry

1.Small Number of Large Firms -The most important characteristic of oligopoly is an industry dominated by a small number of large firms, each of which is relatively large compared to the overall size of the market. While each firm does not have as much market control as monopoly, it definitely has more than a monopolistically competitive firm. A oligopoly firm actually can have a large number of firms, approaching that of any monopolistically competitive industry. However, the distinguishing feature is that a few of the firms are relatively large compared to the overall market.

2.Identical or Differentiate Products-

3.Barriers to Entry-Barriers to entry are the key characteristic that separates oligopoly from monopolistic competition on the continuum of market structures. With few if any barriers to entry, firms can enter a monopolistically competitive industry when existing firms receive economic profit. This diminishes the market control of any given firm.

Any firm seeking to enter this market is faced with significant barriers.