What is an oligopoly?
Q: What is an oligopoly?
A: An oligopoly is a market form in which the market or industry is controlled by a small number of sellers.
Q: What are high barriers to entry?
A: High barriers to entry refer to hindrances that prevent new firms from entering the market or even be able to have a significant market share.
Q: How do sellers in an oligopoly market behave towards each other?
A: As there are only a few sellers in the market, each seller would take note of the actions made by one another and think about how the other sellers will respond when making decisions.
Q: What is the possibility of an oligopoly?
A: An oligopoly can come together to make a common decision that allows them to have less competition and charge higher prices for consumers.
Q: Why do oligopoly markets charge higher prices for consumers?
A: There are few sellers in the market, and they have more power to control the market and limit supply. This allows them to charge higher prices for goods and services.
Q: What is the impact of oligopolies on competition?
A: Oligopolies reduce competition, as there are only a few sellers controlling the market, and they can work together to limit supply and increase prices.
Q: Why is it difficult for new firms to enter an oligopoly?
A: Oligopolies have high barriers to entry, making it hard for new firms to establish themselves and gain a significant market share. The existing firms have an advantage in controlling access to resources and distribution channels.
