oLigopoLy A

market structure dominated by a few large producers of homogeneous or differentiated products.

In terms of competitiveness, the spectrum of market structures reaches from pure competition to monopolistic competition, to oligopoly, to pure monopoly (review Table 9-1). We now direct our attention to oligopoly, a market dominated by a few large producers of a homogeneous or differentiated product. Because of their small number, oligopolists have considerable control over their prices, but each must consider the possible reaction of rivals to its own pricing, output, and advertising decisions.

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