What is oligopol?

Oligopol is a situation where a small number of large companies dominated on the market, with most of the market share occupying the products and services they provide. A common example in many countries is the mobile phone industry, where a handful of large companies usually occupy 80% or more market. Some related terms include a monopoly where only one company dominates the market, and Duopoly, where two companies have most of the market share.

Oligopols often naturally arise how companies grow and begin to capture more market, push smaller companies or absorb them. Over time, the number of companies offering specific products and services is beginning to shrink and consumers rely on several large companies rather than on a network of smaller companies. In Oligopol, large companies tend to control prices and access, which makes other companies very difficult to penetrate the market. This also makes it very difficult to break their industry.

Large companies inevitably develop a interdependent relationship, because the actions of one society have a deep impact on others. When the company reduces prices, offers new services or develops new products, competitors must follow a lawsuit or risk loss of customers. This may result in a secret agreement and prices, and sometimes it is difficult for regulatory authorities to determine when companies in Oligopol really act independently and when they work as a cartel to repair market conditions.

Oligopol may be unfavorable to consumers. With just a few large companies that offer very similar options on which they can rely on, people may have trouble finding products and services at competitive prices. If they can find smaller businesses, they can be able to get a better solution, but many of these companies seek to expand Svědohah and many products. Large companies can also hardly participate in government lobbying to increase chances of NAnd the laws favorable to their interests, and this could hurt small societies.

Governments will not act to dilute oligopol unless they cannot find clear evidence of pricing or are concerned that society may be on the way to become a monopoly. When large companies are gaining, they may have to go through the regulatory inspection to see if the merger would result in the creation of a single dominant society. The government may require companies to sell divisions to prevent it if they want to go through.