Perfect oligopoly is a market in which there are a few sellers selling a homogeneous product. Homogeneous product is a product which is identical in quality, shape, size, colour etc. For example, steel, fertilisers, etc. Imperfect oligopoly is a market in which there are a few’ sellers selling differentiated product. Differentiated products are products of similar nature but are made different on the basis of brand name, packaging, advertising etc. For example, soap, toothpaste, cars, motorcycles etc. Oligopoly refers to a market situation in which there are few firms. Each firm can influence the price by his own action. But, a change in price and output of a product by any firm is likely to influence the output and profit of rival firms whose reaction may prove counter productive. This makes the firms mutually interdependent. For example, if there is interdependence of decision between Maruti Ltd. and Tata Motors. If Maruti Ltd. reduces the price of its cars, Tata Motors will follow the same substantially. Accordingly, while taking decision about price and output, a firm has to consider the possible reaction of rival firms in the market.