Question

Mention any three features of an oligopoly market.

Answer 1

Three features of an oligopoly market are:

1. Intensive Competition: Intense competition is a key element of oligopoly. Because the enterprises are so few in number, they all endeavour to acquire the lion's share of the market by various means. These strategies may include extensive and intensive promotion, celebrity endorsement of items, after-sales support, a gift programme with a certain purchase, a special discount on a specific purchase, and so on.
2. Importance of selling cost: Because of the high competition and interdependence of enterprises under an oligopoly, firms compete with one another using various sales promotion techniques such as price cuts, discounts, door-to-door campaigns, advertising, and so on. As a result, in an oligopoly market structure, selling expenses and advertising are extremely important.
3. The barrier to entry: In the long run, the presence of oligopoly necessitates the presence of effective obstacles to new business entry into the industry. In the absence of these hurdles to a new business entrance, the oligopoly may lose its monopolistic characteristics. In the long run, the same primary hurdles to entry for sellers are price cuts, patent rights, control over critical inputs, and so on.