Question

provide 5 examples of an oligopoly. please explain why each example is an oligopoly.

Answer 1

The first example is the group of OPEC nations who produce crude oil. It is an oligopoly, because these nations, depend upon each other, collectively fix the price and output decisions and show the signs of cartel along with similarity in their products produced that is crude oil. The second example is the US telecom industry. It is an oligopoly because it has few large firms, having majority of the market share. Further, this industry has the entry barriers in the form of huge investments required to enter the industry. Services on offer are very similar. All these characteristics show that it is an oligopoly. Third example is the automobile industry. It is an oligopoly due to the presence of few large players, entry barriers and interdependence in setting the price of automobile products. The fourth example is music & entertainment industry in the US and acting as an oligopoly due to the presence of few players such as Sony, UMG and Warner group and BMG. It makes these firms to dominate and set the price that is to be followed by the smaller players. There are entry barriers as well, making the industry to be oligopoly. The fifth example is specific sub-domain of IT industry that produces operating systems. It is Google, Apple and Microsoft. Only these three MNCs dominate the market and control it. There are different types of entry barriers such as technological and legal barriers. It makes this sub-domain to be oligopoly in nature.