Monopoly and oligopoly are economic market conditions where there is imperfect competition in the market. Many people are aware of what monopoly is, and the U.S government has taken steps to make monopolies illegal. Some individuals are still unaware of the many oligopolies operating in the economic system of U.S today. Monopoly and oligopoly are similar, but not the same this article explores their differences and examples.
A monopoly is a form of a market structure where one seller sells his distinctive product and dominates the entire market. While oligopoly is a market situation, which few firms in the market sell either homogenous or differentiated product and complete in the market. There are differences between monopoly and oligopoly. In a monopoly, high prices may be charged since there is no competition while in the case of oligopoly, there is moderate or fair pricing due to competition in the market, but it is much higher than a perfect competition where there are a large number of buyers and sellers.
Delegate your assignment to our experts and they will do the rest.
Where barriers to entry are high monopoly exists, it can be due to patents, distribution overhead, government regulation, technology or capital-intensive nature of the industry. This is not always the case in the oligopoly where barriers to entry are very high because it is difficult to enter the industry due to economies of scale. An example of oligopoly in the U.S is the Automobile industry; there exists a variety of manufacturers to choose. However, the major players are General motors, ford Honda and Toyota. They control the action of each other and their competitors. Internal revenue service in the U.S is monopoly. They are the only agency who enforces income tax.
