Features of the oligopoly market structure
- Has few large sellers and many buyers.
- The firms are interdependent among themselves especially in their output and pricing.
- Non-price competition, firms are in a position to influence the prices. However, they try to avoid price competition for the fear of price war.
- There is barriers to entry of firms due to reasons such as; requirement of large capital, Ownership of production rights, control over crucial raw materials, Restrictive practices etc
- High cost of selling through methods of advertisement due to severe competition.
- Products produced are either homogeneous or differentiated.
- Uncertain demand curve due to the inter-dependence among the firms. Hence the shifting of the demand curve is not definite.
- There is price rigidity i.e. once a price has been arrived at in an oligopolistic market, it tends to remain stable.