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17 July, 00:34

How is oligopoly different from monopolistic competition?

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  1. 17 July, 00:49
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    Oligopoly market involves few large sized firms with some restrictions on entry.

    Monopolistic market has large number of small firms with relatively easier entry and exit.

    Explanation:

    Oligopoly is a market structure where there are only a small number of firms in a market. These firms are dominant and control major market shares. The entry into the market is slightly difficult due to several barriers. The firms in this market may produce homogeneous or heterogeneous products.

    However, in a monopolistic market there are large number of firms which are small in size. These firms produce differentiated products which are close substitutes. The entry and exit in this market is relatively easier.
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