What are current examples of oligopolies?

An oligopoly is a form of market wherein only a small number of large sellers operate.

Firms operating in an oligopoly maximize profits just like companies in other market structures: profit is maximized at the level of output where marginal cost is equal to marginal revenue.

Other characteristics of oligopolistic markets include:

High barriers to entry: It takes a lot of capital and skill to compete in this market. It is nearly impossible to penetrate this market as a start-up.

Interdependence: Activities of one oligopolistic firm greatly affect the actions of its competitors. For instance, if Ford lowered their pricing points significantly, Tesla might also be forced to also lower their prices to remain competitive.

Few operators: Only a few large sellers operate in an oligopolistic market

Examples of oligopolies include:

The automobile industry as dominated by brands like Tesla and Ford:

• The airline industry
• The soft drinks industry (Pepsi and Coca-Cola)
• Steel industry
• The oil industry