Monopoly vs. Oligopoly: What's the Difference?
Monopoly: Market with one dominant seller. Oligopoly: Market with few dominant sellers.
Monopoly exists when a single company or entity dominates an entire market, setting prices without competition. Oligopoly, on the other hand, occurs when a few companies dominate a market, often leading to some level of price collaboration.
In a Monopoly, the single seller has complete control over the supply and pricing of goods or services. In an Oligopoly, while few firms dominate, they must consider the actions of their competitors in their strategic decisions.
Barriers to entry are extremely high in a Monopoly, preventing new entrants from competing. In an Oligopoly, barriers exist but are not insurmountable, allowing for some level of competition.
Consumer choice is severely limited in a Monopoly due to the absence of alternative providers. In an Oligopoly, consumers have some choices, albeit limited, among the few dominating firms.
A Monopoly can lead to higher prices and less innovation due to lack of competition. An Oligopoly, while also limiting competition, may have more innovation and competitive pricing due to the presence of multiple players.
Number of Sellers
One dominant seller
Few dominant sellers
Complete control over market
Shared control among few firms
Barriers to Entry
High but not insurmountable
Limited but more than in a monopoly
Price and Innovation
Often higher prices, less innovation
Potential for competitive pricing, more innovation
Monopoly and Oligopoly Definitions
Absence of competition in a market.
Their monopoly allowed them to set high prices.
Limited competition among major players.
In this oligopoly, firms subtly competed.
Single seller in a market.
She criticized the monopoly for poor service.
Few companies controlling a market.
He studied pricing strategies in an oligopoly.
Sole provider of a product or service.
The rail company operated as a monopoly.
Market dominated by a few firms.
The airline industry is an oligopoly.
Dominant control by one entity.
The tech giant's monopoly worried regulators.
Concentrated market power among few.
In the oligopoly, each firm's decision mattered.
Exclusive control by one group of the means of producing or selling a commodity or service
"Monopoly frequently ... arises from government support or from collusive agreements among individuals" (Milton Friedman).
Small number of dominant sellers.
The oligopoly led to high smartphone prices.
A company, group, or individual having exclusive control over a commercial activity.
A market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors.
A commodity or service so controlled.
An economic condition in which a small number of sellers exert control over the market of a commodity.
Exclusive possession or control
Arrogantly claims to have a monopoly on the truth.
(economics) a market in which control over the supply of a commodity is in the hands of a small number of producers and each one can influence prices and affect competitors
Something that is exclusively possessed or controlled
Showed that scientific achievement is not a male monopoly.
A situation, by legal privilege or other agreement, in which solely one party (company, cartel etc.) exclusively provides a particular product or service, dominating that market and generally exerting powerful control over it.
An exclusive control over the trade or production of a commodity or service through exclusive possession.
A land monopoly renders its holder(s) nearly almighty in an agricultural society.
The privilege granting the exclusive right to exert such control.
Granting monopolies in concession constitutes a market-conform alternative to taxation for the state, while the crown sometimes bestowed a monopoly as an outrageous gift.
(metonymy) The market thus controlled.
(metonymy) The holder (person, company or other) of such market domination in one of the above manners.
The exclusive power, or privilege of selling a commodity; the exclusive power, right, or privilege of dealing in some article, or of trading in some market; sole command of the traffic in anything, however obtained; as, the proprietor of a patented article is given a monopoly of its sale for a limited time; chartered trading companies have sometimes had a monopoly of trade with remote regions; a combination of traders may get a monopoly of a particular product.
Raleigh held a monopoly of cards, Essex a monopoly of sweet wines.
Exclusive possession; as, a monopoly of land.
If I had a monopoly out, they would have part on 't.
The commodity or other material thing to which the monopoly relates; as, tobacco is a monopoly in France.
(economics) a market in which there are many buyers but only one seller;
A monopoly on silver
When you have a monopoly you can ask any price you like
Exclusive control or possession of something;
They have no monopoly on intelligence
A board game in which players try to gain a monopoly on real estate as pieces advance around the board according to the throw of a die
Exclusive control over a market.
The utility company held a monopoly in the region.
What is a Monopoly?
A market structure with one dominant seller controlling prices and supply.
Can new companies easily enter a Monopoly market?
No, high barriers to entry prevent new competitors.
What is an Oligopoly?
A market structure where a few companies dominate and influence the market.
Do consumers have choices in an Oligopoly?
Yes, but choices are limited to the few dominating firms.
How does a Monopoly affect prices?
In a monopoly, prices tend to be higher due to lack of competition.
Can a Monopoly lead to consumer exploitation?
Yes, due to absence of alternative providers.
Are there barriers to entry in an Oligopoly?
Yes, but they're not as insurmountable as in a monopoly.
Do companies in an Oligopoly innovate?
More likely, as they compete with each other.
How competitive is an Oligopoly?
Limited competition among the few major players.
Is innovation common in a Monopoly?
Often less innovation due to lack of competitive pressure.
Does competition exist in a Monopoly?
No, the sole seller dominates without competition.
Can oligopolies be beneficial?
They can drive innovation and competitive pricing.
Is consumer feedback important in a Monopoly?
Less so, as there's no competition.
Are Oligopolies prevalent?
More common in industries with high entry costs.
Do firms in an Oligopoly consider competitors' actions?
Yes, strategic decisions often consider competitors.
Are Monopolies common?
Less common, often regulated or restricted.
Is price fixing possible in an Oligopoly?
It can occur, as firms may collaborate on pricing.
What's a key characteristic of a Monopoly?
Single seller with complete market control.
What defines an Oligopoly?
Few firms holding significant market power.
What's a downside of a Monopoly?
It can lead to reduced consumer welfare and choice.
Written bySawaira Riaz
Sawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
Edited bySumera Saeed
Sumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.