![]() ![]() Oligopoly has stringent barriers to the entry of new firms or the departure of any existing firms. Oligopoly market is one of the market structures under perfect competition, where a few numbers of sellers gather together of large firms and sell similar or homogeneous products to the customer. Monopolistic competition examples are restaurants like Dominos sells Aloo Tikka Pizza in India, whereas pepperoni pizza sells in American firms. Examples The automobile industry of large firms- like Tata Motors sells homogeneous products. A monopoly is termed as a single firm selling or setting products at their own decided price. Monopolistic competition firms are independent. So setting prices may reflect the performance of other firms in an oligopoly market. Therefore, the action of one firm makes an impact on other firms. Interdependence Oligopoly firms are highly interdependent on other firm’s actions because there are only a few firms in the market selling analogous products. The firms sell products that are different in size, colour, shape or price. The nature of products under monopolistic competition is heterogeneous or differentiated products. ![]() Sometimes, they also sell differentiated products to compete with other firms. ![]() Nature of products Oligopoly firms sell homogeneous products which are similar in size, shape, colour, material and price. The entry and exit of Monopolistic competition are free, where the new firm can enter as well as existing firms sustaining loss can freely leave the market. Moreover, Government regulation on the entry of new firms is quite difficult as the existing firm is already making an optimized profit. Entry and Exit Strict barriers to entry and exit of oligopoly firms to the market can reflect the other firm’s actions as actions of one firm. There are many MC firms, where each firm sells a set of similar products while competing with other MC firms who are selling another set of different products. Number of sellers There are a few sellers of large firms. Monopolistic competition is imperfect competition, with many firms selling particular or grouped heterogeneous products to the customers. Comparison Table Parameters of Comparison Oligopoly Monopolistic Competition Meaning An oligopoly market is a small number of sellers of large firms tout interlinked homogeneous or differentiated products to the customers. On the other hand, other MC firms sell their selected similar product. Furthermore, Monopolistic competition is subsumed by many firms, where each MC firm sells a similar product. Entry and exit of firms under monopolistic competition are done freely without any government involvement. ![]()
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