How to be a Successful Oligopolistic Firm in the Long Run

The way to become an oligopoly that has been successful over the long term is well known and every company wants to succeed in that business. Sometimes it is difficult to decide what action to take in order to achieve it. Especially oligopolistic market is difficult as it is one of the most complicated market structure. Oligopolises include many models and theories such as duality, producers of only two companies, price determination to warn monopoly, distortion of demand curve, decline in economic profit, cartel, short-term economic benefit etc.

In the long term, entry barriers prevent too many companies from competing in the industry. Therefore, oligopolies will gain special benefits in the long run. Companies carefully consider reactions to behaviors of other companies. Therefore, distorted demand curve theory states that prices in oligopoly and levels of output may be stable over the long term. Collusion - Collusion is an agreement between entities for profit purposes. This happens when companies within the industry collaborate on specific issues to achieve mutual benefits. Some companies' conspiracy decisions had a major impact on the market. Collusion is illegal in many countries, but it still exists. Certain types of practices are called implicit conspiracy if companies do the same price determination but do not negotiate with each other. Market leaders may change prices or other people, also known as price leadership, tend to follow.

When considering oligopolistic companies it is important to note that these are the companies that dominate the oligopolistic market. Business is usually a price leader for trends and pricing, and price leader is a company that manages when determining prices of goods and services in the market. The price leader 's behavior leaves the opponent, seeks partnerships and transactions, forms and establishes prices that exceed the marginal cost of the controlling company. This means that the oligopolists set prices to maximize their interests. After all, it provided conditions for partners and cooperation to promote the success of themselves and other companies, especially SMEs operating in the same market or industry.