Economic Market Conditions: What are Monopoly and Oligopoly

Monopoly and oligopoly are two economic market conditions. They all coexist in our world and are distinguished from one another. In this article I will explain the two market conditions. We will explain each function based on the number of suppliers, product differentiation, strengths and weaknesses, and the most difficult types of barriers to entry into both market structures. Monopoly is a market structure with only one producer or seller of products or services.

Monopoly and oligopoly are economic market structures and market competition is not perfect. The monopolistic market consists of companies that do not produce substitutes, and there are major barriers to entering other companies. In the oligopolistic market, there are several relatively large companies that produce similar but slightly different products. Likewise, entry of other companies has a major obstacle. Depending on the geographical size of the market, it is decided whether there is an oligopoly or monopoly. There is no substitute for the same product, but if there are two or three similar companies nationwide, the company may dominate the sector-specific industry. Therefore, the company may be region monopoly, but it is active in the oligopolistic market in a wider geographical area.

Monopoly power arises from the fact that it is the only viable product seller in the industry. There is little monopoly in the United States. However, oligopolistic, oligopolistic companies may influence the market by setting prices, marketing strategies, and customer service. A prominent example of oligopoly conspiracy in the US publishing market. In 2012, the Ministry of Justice sued six major book publishers responsible for repairing price e-books. In the free market, price determination is not sustainable without judicial intervention. When a company hinders competition, other companies are forced to obey lawsuit right away. Companies that lower prices to unprofitable companies can not maintain their business for a long time. For this reason, oligopolistic members compete in terms of image and quality rather than price. (To read, see: What is the most famous oligopoly case?)