Olygopoly

TUTORIA

Oligopoly
Market situation in which a small number of selling firms control the market supply of a particular good or service and are therefore able to control the market price. Anoligopoly can be perfect-where all firms produce an identical good or service (cement)-or imperfect-where each firm's product has a different identity but is essentially similar to the others(cigarettes). Because each firm in an oligopoly knows its share of the total market for the product or service it produces, and because any change in price or change in market share by one firm isreflected in the sales of the others, there tends to be a high degree of interdependence among firms; each firm must make its price and output decisions with regard to the responses of the other firms inthe oligopoly, so that oligopoly prices, once established, are rigid. This encourages nonprice competition, through advertising, packaging, and service-a generally nonproductive form of resourceallocation. Two examples of oligopoly in the United States are airlines serving the same routes and tobacco companies.

Dictionary of Finance and Investment Terms


Oligopoly
Marketing situationin which there are only a few competitors (usually large companies) for customers in a particular industry and where each of the competitors is sensitive to the others' marketing strategies,particularly in the area of product price. The automobile industry in the United States is an oligopoly because only six firms (General Motors, Ford, Chrysler, Honda, Toyota, and Nissan) account foralmost 90% of U.S. automobile sales.

Dictionary of Marketing Terms

Oligopoly
1. Industry in which a few large sellers of similar products, such as automobiles, dominate the market.
2.Condition of a specific products market so dominated. An oligopolistic industry is more concentrated than a competitive one but less so than a monopoly . See also oligopsony .
Dictionary of Business Terms