oligopoly
ol-ih-GOP-uh-lee
/ˌɒlɪˈɡɒpəli/
A state of limited competition, in which a market is shared by a small number of producers or sellers.
Firms in an oligopoly are interdependent; one firm's pricing or output decision directly affects the others.
The story behind the word. Coined in English in the late 19th century by combining Greek 'oligos' (few) with 'polein' (to sell), creating a precise counterpart to monopoly for markets ruled by a handful of corporate giants.
Word relationships
- duopoly: A duopoly is a specific type of oligopoly limited to exactly two dominant firms.
- perfect competition: Perfect competition involves innumerable sellers, whereas oligopoly involves only a few.
Commonly confused with
- monopoly: Monopoly is single-seller control; oligopoly is few-seller control.
Word family
- oligopolistic (adjective): Relating to or characterized by an oligopoly.
Collocations
- tight oligopoly
- oligopoly market
- collusive oligopoly
Example sentences
- "The commercial airline market operates as an oligopoly dominated by three major carriers." Industry structure analysis
- "In an oligopoly, companies often avoid price wars and focus on non-price competition like marketing." Economic policy research
Memory hook
OLIGO means FEW sellers sharing the market pie. Oligo = A few big players.
When not to use
Do not use when there is only one dominant seller or when hundreds of small sellers compete freely.
Fun facts
- Mobile telecom and wireless services in most industrialized countries operate as oligopolies with 3 to 4 national providers.
Related words
Explore more words
interdependent, interdependence, strategic, collusion, equilibrium, interconnectedness
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