Conditions for Oligopolistic Market Oligopoly is the least understood market structure; con-
sequently, it has no single, unified theory. Nevertheless, there is
some agreement as towhat constitutes an oligopolistic market.
Three conditions for oligopoly have been identified. First, an
oligopolistic market has only a few large firms. This condition
distinguishes oligopoly from monopoly, in which there is just
one firm. Second, an oligopolistic market has high barriers to
entry. This condition distinguishes oligopoly from perfect
competition and monopolistic competition in which there are
no barriers to entry. Third, oligopolistic firms may produce
either differentiated or homogeneous products. Examples of
oligopolistic firms include automobile manufacturers,oil pro-
ducers, steel manufacturers, and passenger airlines.
