Oligopoly market signifies the market where the number of suppliers is limited but still there is some competition in the market.
The basic characteristics of Oligopoly are
- A small number of suppliers in the market, but no monopoly by any specific supplier.
- The suppliers are dependent to each other for any kind of price increase or decision making. Decision taken by one supplier affects the profit and business of other supplier.
- Products are almost similar with no significant differences.
- There are very high barriers to entry in the same product segment with huge capital investment.
Auto sector is a perfect example of Oligopoly.