Oligopoly vs. Monopoly vs. Perfect and Monopolistic Competition

Oligopoly: An oligopoly is an industry composed of a relatively small number of firms that engage in strategic behavior to determine market output and prices. The firms typically have some degree of control over the prices they charge and tend to form cartels to maintain these prices. Monopoly: A monopoly is when a single company or supplier has exclusive control over a certain market, allowing it to set prices and restrict output. This type of market structure limits competition and allows the company to act independently of the forces of supply and demand. Perfect Competition: Perfect competition is a market structure in which many firms compete against one another selling an identical product. Under perfect competition, firms have no control over price and no market power. A market with perfect competition is characterized by an absence of market domination and an unlimited number of buyers and sellers. Monopolistic Competition: Monopolistic competition is characterized by a market in which there are a large number of firms that produce and sell similar but slightly differentiated products. Unlike perfect competition, firms in a monopolistically competitive market structure have some degree of market power, allowing them to increase or decrease prices to increase their profit.