Oligopolistic

Adjective used to describe a market structure where a small number of firms hold a significant share of the market. In oligopolistic markets, these few firms have considerable control over prices and can influence market dynamics due to their interconnected strategies, leading to potential collusion and reduced competition.

Oligopolistic meaning with examples

• The telecommunications industry is often described as oligopolistic, with a few major companies dominating the market and making it challenging for new entrants to gain a foothold.
• In an oligopolistic market, firms may engage in price leadership, where one company sets prices that others follow, maintaining a delicate balance to avoid price wars.
• Oligopolistic competition can lead to innovation, as companies vying for a share of the market may invest heavily in research and development to differentiate their products.
• During economic downturns, oligopolistic firms might band together to maintain prices, reducing competitive pressure and potentially harming consumers by limiting choices.
• Regulators often scrutinize oligopolistic industries for anti-competitive practices, ensuring that these firms do not collude to manipulate prices in ways that harm consumers.