(i) Few firms: Under oligopoly, there are few large firms each producing a significant portion of the total output. 

For example: the market for automobiles in India is an oligopolist structure as there are only a few producers of automobiles. The number of firms is so small that action by anyone firm is likely to affect the rival firms. So, every firm keeps a close watch on the activities of rival firms.

(ii) Interdependence: Due to few large firms under oligopoly are interdependent with respect to their price/output policy. Interdependence means that actions of one firm affect the actions of other firms. A firm considers the action and reaction of the rival firms while determining its price and output levels.

(iii) Non-Price Competition: Firms try to avoid price competition for the fear of price war. They use other methods like advertising, better services to customers, etc. to com¬pete with each other. Under oligopoly, firms are in a position to influence the prices. However, they follow the policy of price rigidity. Price rigidity refers to a situation in which price tends to stay fixed irrespective of changes in demand and supply conditions.

(iv) Role of Selling Costs: Due to severe competition and interdependence of the firms, various sales promotion techniques are used. Selling costs are very important and oligopolistic firms spend much on advertisement and customer services in order to promote sales of its product. Advertisement is in full swing under oligopoly, and many times advertisement can become a matter of life-and-death. 

For example: T.V. commercials war between Coke and Pepsi. It relies more on non-price competition. Therefore, selling costs are more important under oligopoly than under monopolistic competition.