The advantages & disadvantages of an oligopoly by christopher raines - updated june 28, 2018 industries that deal in products such as automobiles, cereals, sodas and motor oil have a few firms that control most of the market. List of disadvantages of oligopoly 1 it offers fewer choices in many cases, choosing the best brand in an oligopoly is like going for the least evil.
The advantages and disadvantages of this market form can be clearly demarcated oligopoly market form exists in the television and media industry, health care insurance industry, and cellular phone service industry of the united sates. Advantages and disadvantages of oligopoly when the market is dominated by a few suppliers, it is termed as oligopoly it can be observed in the television industry of the united states, where the market is governed by a handful of market players the advantages and disadvantages of this market form can be clearly demarcated.
Some of the advantages and disadvantages of oligopoly are as follows so let us check out some information on pros and cons of oligopoly to know more about oligopoly. An oligopoly is where you will find only a small group of suppliers and companies controlling all of the market it is different from a monopoly, where only a single business has control over the entire market oligopolies rule many different industries, with healthcare, media and mobile phone service industries as the most common.
This essay will discuss the advantages and disadvantages of the oligopoly market system supermarket has brought into the service for man for long the roots of supermarkets are the co-operative of the nineteenth century at the beginning of the early 20th century the people come up to an idea for selling goods. Advantages of oligopoly large firms having strong hold over the market are able to make huge profits as there are few players in the market in oligopoly, many times, products of two different competitive companies are derived out of one large firm. Disadvantages of oligopoly setting of prices may be advantageous for the firms, but if done unrealistically, it may prove to be a great disadvantage for consumers creative ideas or plans of small businesses in the oligopolistic market fail to realize because they cannot overcome the control of major market players.
What is oligopoly oligopoly is a market or industry which is dominated by a small amount of sellers this means that the small amount of sellers all tend to be aware of one another and what business decisions they are all making. In an oligopoly market, the price maker is the oligopoly firm which shows that the firms can set up the price as they want for the product, every oligopoly company produces homogeneous product and service the big four use their selves' advantages to build high barrier to entry which is to protect their market share.
Important facts about oligopoly the term oligopoly comes from the term oligarchy this is a type of government where only a few people hold all of the people in the united states the biggest oligopoly market is the wireless communication industry only 7 companies make up nearly 90 percent of all profits made by film companies in america. Advantages and disadvantages relative to what compared to a perfectly competitive market, oligopolies are better for the firms, because they have the opportunity to make an economic profit in the long run.