Describe the features of oligopoly?

1.	Describe the features of oligopoly?
Answer» Features of oligopoly: 1. Few large firms: Very few big firms own the major control of the whole market by producing major portion of the market demand. 2. Interdependence among firms: The price and quality decisions of a particular firm are dependent on the price and quality decisions of the rival firms. 3. Group behaviour: The firms under oligopoly realise the importance of mutual co-operation. 4. Advertisement cost: The oligopolist could raise sales either by advertising or improving the quality of the product. 5. Nature of product: Perfect oligopoly means homogeneous products and imperfect oligopoly deals with heterogeneous products. 6. Price rigidity: It implies that prices ate difficult to be changed. The oligopolistic firms do not change their prices due to the fear of rival’s reaction.

Answer»

Features of oligopoly:

1. Few large firms: Very few big firms own the major control of the whole market by producing major portion of the market demand.

2. Interdependence among firms: The price and quality decisions of a particular firm are dependent on the price and quality decisions of the rival firms.

3. Group behaviour: The firms under oligopoly realise the importance of mutual co-operation.

4. Advertisement cost: The oligopolist could raise sales either by advertising or improving the quality of the product.

5. Nature of product: Perfect oligopoly means homogeneous products and imperfect oligopoly deals with heterogeneous products.

6. Price rigidity: It implies that prices ate difficult to be changed. The oligopolistic firms do not change their prices due to the fear of rival’s reaction.

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