Competition in turn ensures moderate prices and numerous choices for consumers. This market situation is very consumer-friendly because it induces competition amongst sellers. Oligopoly, on the other hand, is a market condition where numerous sellers co-exist in the market place. This market condition usually arises from mergers, take-overs and acquisitions. The monopolist asserts all the power while the consumer is left with no choice. Consumers have limited choices and have to choose from what is supplied.

The seller here has the power to influence market prices and decisions. Monopolistic markets are controlled by one seller only. Health insurers, wireless carriers, beer (Anheuser-Busch and MillerCoors), media (TV broadcasting, book publishing, movies), etc.Īn oligopoly of various brands (click to enlarge) Characteristics Microsoft (Operating systems, productivity suites), Google (web search, search advertising), DeBeers (diamonds), Monsanto (seeds), Long Island Rail Road etc. Each firm can therefore significantly influence the market by setting price or production quantity.

Market making ability because of very few firms in the industry. Market making ability by virtue of being virtually the only viable seller in the industry. These firms compete with each other based on product differentiation, price, customer service etc.Ī monopoly usually exists when barriers to entry are very high - either due to technology, patents, distribution overheads, government regulation or capital-intensive nature of the industry.īarriers to entry are very high as it is difficult to enter the industry because of economies of scale. But much higher than perfect competition (where there is a large number of buyers and sellers)Ī single firm controls a large market share in the industry, thereby gaining the ability to set price.Ī small number of firms dominate the industry. Moderate/fair pricing due to competition in market. High prices may be charged since there is no competition A small number of large firms that dominate the industry. Comparison chart Monopoly versus Oligopoly comparison chartĪn economic market condition where one seller dominates the entire market.Īn economic market condition where numerous sellers have their presence in one single market.

Competition market vs monopoly examples