Ads end in 20 seconds
This content is free thanks to our sponsors
Sponsored Ad – I may earn a commission if you click and buy
Economics
Oligopoly
A market dominated by a small number of large companies where each firm's actions affect the others.
In an oligopoly, companies tend to avoid direct price wars and compete on branding, loyalty schemes, or innovation instead. Barriers to entry are high, so new competitors struggle to break in.
It's like four big kids controlling the whole playground — when one starts running, the others usually follow.
Real world: The UK supermarket sector (Tesco, Sainsbury's, Asda, Morrisons) is an oligopoly. When one cuts prices or launches a new service, the others quickly respond.
💡 Oligopolies give big companies power — but they must watch each other constantly.