Meaning of Oligopoly Market:

The term oligopoly is deriving from two Greek word Oligo and poly which means few and sells. Under oligopoly we come across a few producers specializing in the production of identical goods or differentiated goods competition with one another. The features of oligopoly market are are peculiar because of its type.

In the modern industrial set up there is a strong tendency towards oligopoly market situation to avoid the wastes of competition in case of competitive industries and to face the emergence of new substitute in case of monopoly industries, oligopoly market is developed. Ex: in case of electric refrigerators, automatic washing machine, radios Etc.

Features of oligopoly:

• Interdependence: Each and every firm has to be conscious of the reaction of its rivals. Since the number of firms are very few any change in price output product etc. By one firm will have direct effect on the policy of other firms  therefore economic calculation must be made always with reference to the reaction to the rival firms as they have high degree of gross elasticity of demand for their products
• Indeterminateness of the demand curve: under oligopoly, there will be the eliminate of uncertainty. Firms will not know the particular factors which could affect demand. Naturally rise or fall in the demand for the product cannot be speculated.
• Conflicting attitude of firms: under oligopoly one side firms may realize the disadvantages of competition and rivalry and desires to unite together to maximize their profit. On the other hand firms guided by individualistic consideration may continuously come in clash and conflict with another this creates uncertainty in the market
• Element of monopoly and competition: under oligopoly a firm has some Monopoly power over the product it produces but not on the entire market. But Monopoly power enjoyed by the firm will be limited by the extent of competition.
• Price rigidity: generally price tends to be sticky or Rigid under oligopoly. This is because of the fact that if one firm changes its price other firms may also resort to the same technique.
• Constant struggle: competition is of unique type in an oligopolistic market. Hence competition consists of constant struggle or rivals against rivals.
• Lack of uniformity: lack of uniformity in the rise of different oligopolies is another remarkable feature.
• Small number of large firms: The numbers of firms in the market are small but the size of each firm is big. The market share of each one of the firm sufficiently large enough to dominate the market.

conclusion:

Oligopoly is a market structure in economics characterized by a small number of large firms dominating the industry. In an oligopoly, the actions of one firm significantly affect the others, leading to strategic interdependence among the key players. Unlike a monopoly (which has a single dominant firm) or perfect competition (which has numerous small firms), an oligopoly falls in between, featuring a concentrated market with a limited number of powerful competitors.

also read: write a note on economies of scale.