Oligopolys

Question 1

What are the features of an oligopoly?

Answer 1

• supply in the industry concentrated in the hands of relatively few firms
• firms must be interdependent - where actions by one firm will have an effect on the sales and revenue of other large firms in the market
• high barriers to entry
• non price competition

Question 2

What is the concentration ratio?

Answer 2

Ratio that indicates the total market share of a number of leading firms in a market or output of these firms as a percentage of the total
High cr = closer to being a monopoly
Low cr = closer to perfect competition