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Explain five features of oligopoly. (10mks)
- Interdependent in decision making to avoid counter reactions from other firms.
- Deal in similar commodities which have been differentiated through colour, packing , pricing.
- Engage in non-price competition through aggressive advertising market segmentation, after sale services etc.
- Few-large firms which control substantial share of the market.
- Engage in price rivalry/competition which may lead to survival or collapse of firms.
- Price rigidity due to fear of selling above or below kinked demand curve.
- Price leadership where the dominant firm dictates market price which rules the market.