Oligopoly vs Monopoly

Difference Between Oligopoly vs Monopoly

In a market, one can find various forms of imperfect market competition for several services and products. Oligopoly vs Monopoly are 2 of them, wherein monopoly can be view for those products and services which will not have any kind of competition, while on the flip side oligopoly can be observed for the products and services with stiffer competition.

Monopoly is a type of market condition wherein the only single seller is selling an entire product, which is .3

0heterogeneous, at the marketplace, further there are no close substitutes to the product which has been offered by the seller.

On the other side, oligopoly is a kind of market competition, whereby there are a lessor few numbers of sellers or vendors in the marketplace who are selling differential or nearly differential products. In an oligopoly, as stated there are only a few firms or sellers who are operating in the marketplace and so, the sellers or the firms are influenced by the activities of other firms or the sellers

Monopoly: Services offered like for Transport, Water, Electricity and so on are the practical examples for the monopoly.

Oligopoly: Industries like an automobile, cold drink, telecommunication etc. can be some of the kind of industries where Oligopoly type of competition can be found out.

Head To Head Comparison Between Oligopoly vs Monopoly(Infographics)

Below is the top 9 difference between Oligopoly vs Monopoly

Key Differences Between Oligopoly vs Monopoly

Both Oligopoly vs Monopoly are popular choices in the market; let us discuss some of the major Difference Between Oligopoly vs Monopoly

• The major difference between Monopoly vs Oligopoly market is Monopoly will refer to a kind of market that has one seller who is dominating the entire market and on the other side the economic structure wherein there are a handful or few of firms or the sellers in the marketplace who are selling similar or same kind of products and who are competing among themselves is an Oligopoly.
• In a monopoly, there is an only a single player in the whole marketplace, but in oligopoly, again the range of players will be from two to ten, in the marketplace.
• In a monopoly kind of competition, the seller will dominate the entire market by selling a unique or say specialty product for which there will be no substitute is available. To the contrary, in oligopoly, the service offered, or the product sold by the firm are either same or different that have closed or nearby substitutes.
• The reasons for restriction on the barriers to the entry in the monopoly market can be economic, legal, or institutional but the major reason for the barrier to the entry in oligopoly kind of competition is economies of scale
• In monopoly the price discrimination does exist, different customers or consumers must pay a different price for the same or similar kind of the product. In contrast to the oligopoly, the price will remain fixed for a longer period.
• In an oligopoly, the firms or the sellers set their product price based on the price of the similar or the same product which is offered by the rival firm or the seller in the marketplace, which is just flip side in the case of monopoly type of competition, as there are no rivals.

Oligopoly vs Monopoly Comparison Table

Below is the 9 topmost comparison between Oligopoly vs Monopoly

Conclusion – Oligopoly vs Monopoly

Well after reading the above statements one may think that monopoly kind of competition will never fail but that’s not the case. Take an example of XYZ firm which is trying to sell a product which is very unique in its form but the same product is disliked by the consumers or the customers where it’s trying to sell them and yes that is the scenario where this XYZ firm which is appearing to be dominating but in the end it will fail miserably and will make losses. So, it’s not always that monopoly competition is the success and does make profit always.

On the flip side, Oligopoly can collide and become one firm in the industry and remove the price wars and charge their consumers or the customers that they want to. In an oligopoly kind of competition, collusion is one of the most typical infraction to lead to the proceedings that are anti-trust.

E.g. In the year 2012, the Department of Justice in the US sued 6 major book publishers for fixing the price of the electronic books.

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