Monopoly and Oligopoly are marketplaces that find when there is cruddy competition.
Firstly, Monopoly is a single large company that manufactures the products. The products of Monopoly refer to no alternative. On the other hand, Oligopoly is a large company that also manufactures products. But there is a difference between the products of a Monopoly and an Oligopoly. Moreover, a monopoly is one company, while Oligopoly has several companies. Let us discuss the differences between Monopoly and Oligopoly in detail.
What is Monopoly?
Monopoly is a company that manufactures accessories. Mainly, Monopoly is a market structure. It controls a factory, company, or industry in a specific area with no substitute. Moreover, many companies are working toward Monopoly. Examples of monopolies are railways, water and sewage systems, and other giant companies.
Furthermore, Monopoly is a highly recommended company all over the world. In addition, it refers to highly costed products to the sellers. It does not compete with any company, so the charges are high. And pricing is continuously changing.
Characteristics of Monopoly
- Single Seller
- Heavy barriers for new entrants
- No availability of a close alternative
- Cost management
- Control essential inputs for industries
- Regularly barriers
- Stability of prices
- Allow for investment in long-term projects
- Source of essential public utilities
- Beneficial for economics
- Wasteful competition
- Highly costed products
- Unnecessary differentiation
What is Oligopoly?
Oligopoly is several companies that are less in numbers but large in manufacturing. Oligopoly produces products and accessories on a large scale. Moreover, the prices of Oligopoly is comparatively low than others. The main reason is that it has several competitors. But prices are moderate in the markets all over the world. The companies using oligopolies are automobile companies, Airlines, and others.
Characteristics of Oligopoly
- Independent of firms
- Heavy barriers to entry
- Slightly different goods
- Shortage of market information
- Price setting
- Industries may be suffering from price wars
- Disadvantageous for small players
Key Differences between Monopoly and Oligopoly
- Price changes continuously in Monopoly. On the other hand, Oligopoly has fixed prices.
- A monopoly demands higher prices than Monopoly due to competitors’ absence.
- Oligopoly is independent of firms in contrast to Oligopoly.
- Oligopoly, as opposed to Monopoly, has a shortage of information.
- Monopoly is a single company, while Oligopoly has several monopolies.
Comparison chart of Monopoly and Oligopoly:
|Number||Group of companies||Single company|
In a nutshell, we can say that Monopoly and Oligopoly are quite different. Monopoly and Oligopolies are functional in various industrial areas in other countries.