ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An oligopoly is when a few companies exert significant control over a given market. Together, these companies may control prices by colluding with each other, ultimately providing uncompetitive prices in the market.

Detailed explanation-2: -In an oligopoly, a few sellers supply a sizable portion of products in the market. They exert some control over price, but because their products are similar, when one company lowers prices, the others follow. In a monopoly, there is only one seller in the market.

Detailed explanation-3: -By acting together, oligopolistic firms can hold down industry output, charge a higher price, and divide up the profit among themselves. When firms act together in this way to reduce output and keep prices high, it is called collusion.

Detailed explanation-4: -Collusive oligopoly is a form of the market, in which there are few firms in the market and all of them decide to avoid competition through a formal agreement. They collude to form a cartel, and fix for themselves an output quota and a market price.

Detailed explanation-5: -Firms are interdependent. Product differentiation. High barriers to entry. Uncertainty.