Management Glossary

  Search Results: oligopoly
oligopoly
A product/service market in which the vast majority of the market is controlled by a very small number of companies. In most jurisdictions it is illegal for companies to collude in order to set prices whether or not it is an oligopolistic market. However, in an oligopoly it is common for companies to follow the dominant company when it comes to setting prices and deciding on production volumes, without there being any formal agreement among the competitors to do so. Unlike in oligopolies, in highly competitive markets it is almost impossible for this price leadership/followership tradition to evolve as there will always be competitors who, because they know that if they don't do it someone else will, see it as being in their best interest to win a higher share of the market by undercutting the company/companies attempting to lead prices higher.
Contributed by: Managerwise Staff

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