Describe the basic characteristics of oligopoly. How does oligopoly compare with the other market structures?

Characteristics of oligopoly.

Oligopoly has several characteristics. For instance, it comprises of few firms which almost have the power to control market sales. Secondly, entry into this market structure is difficult since the barrier is high, especially those small firms. Since the firms in this market structure enjoy economies of scale, any startup firm will have to use a lot of capital to survive in competition. More so, oligopoly firms mostly rely on advertisements.

Oligopoly market structure has differences and similarities when compared to other market structures. For instance, on similarities, oligopoly is an example of imperfect competition similar to monopolistic competition. However, the two market structure has a difference in them. Oligopoly comprises of few numbers of firms, while monopoly comprises several firms. On exits and entry barriers, monopoly barriers are low while the oligopoly market structure is very high.