Describe the concept of an oligopoly.

Describe the concept of an oligopoly.

An oligopoly is a market structure characterized by a small number of large firms dominating the industry. These firms have significant market power and can influence prices and output levels. The barriers to entry in an oligopoly are high, which makes it difficult for new firms to enter the market and compete with the existing ones. Oligopolistic firms often engage in strategic behavior, such as price fixing or collusion, to maximize their profits. Additionally, they may engage in non-price competition, such as advertising or product differentiation, to gain a competitive advantage.