One of the criticisms of oligopolies is the adverse impacts these firms have on income distribution. Do you believe that is a valid criticism? Discuss with examples.

Since an oligopolistic structure of the market only serves as an advantage to the few market dominants in an economy, the criticism that oligopolies have an adverse impact on the distribution of income is entirely valid. Oligopolies control the market and hence indulge in the production of fewer output quantities and impose high prices on them which blocks out the emergence of perfect competition. This alienates the possibility of allocating resources efficiently in an economy by placing wealth on several recipients that dominate the market which poses a negative impact on the concept of income distribution. This wealth in the long-run results in societal abuse with the market dominants exercising illegal influence politically and socially. An example of an oligopoly is in the oil market which has a few participants like Total, Shell, and Chevron.

Another example is in the automobile industry whereby there is no entry into the market which is run by a few established brands.