ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Yes, the oil industry is an oligopoly. It is because it shares its characteristics with an oligopoly firm. Some of the characteristics of the oil are industry is-barriers to entry, products sold by firms are identical or differentiated, and there are small numbers of firms but are large in size.

Detailed explanation-2: -The OPEC member nations are major suppliers of oil in the world. Thus, it is evident that there are only fewer nations that dominate the world oil market. So, it can be concluded that OPEC is an example of an oligopoly market form.

Detailed explanation-3: -The oil industry was prone to what is called a natural monopoly because of the rarity of the products that it produced. John D. Rockefeller, the founder and chair of Standard Oil, and his partners took advantage of both the rarity of oil and the revenue produced from it to set up a monopoly.

Detailed explanation-4: -Some examples of oligopolies include the car industry, petrol retail, pharmaceutical industry, coffee shop retail, and airlines. In each of these industries, a few large companies dominate.