Oligopoly Vs Monopoly

Oligopoly is a market structure characterized by a small number of firms that dominate the market, leading to limited competition. In an oligopoly, each firm is aware of the actions of its competitors, which can result in strategic decision-making regarding pricing, production, and marketing. The interdependence among firms means that one company's actions can significantly impact others, often leading to collusion or cooperative behavior to maximize profits. Oligopolistic markets can exhibit features such as price rigidity and product differentiation, and they can be found in industries like telecommunications, automotive, and aviation.

Monopoly is a market structure where a single firm is the sole producer or seller of a product or service, giving it significant control over the market. In a monopoly, the monopolist faces little to no competition, allowing it to set prices above marginal cost, which can lead to higher profits and potentially decreased consumer welfare. Monopolies can arise due to various factors, including control of essential resources, government regulation, or significant barriers to entry that prevent other firms from entering the market. While monopolies can lead to economies of scale, they often result in inefficiencies and reduced innovation over time.