Advantages and Disadvantages of Oligopoly

Some of the Advantages and Disadvantages of Oligopoly are as follows. So let us check out some information on pros and cons of oligopoly to know more about oligopoly.

Some Advantages of Oligopoly are as follows:

1. During oligopoly the products can be easily differentiated.
2. Firms have some control on price during oligopoly.
3. Price stability within market can be seen during oligopoly.
4. In oligopoly incentive to develop new and better products can be observed.
5. Greater choices for consumer can be observed in oligopoly compared to monopoly.
6. Large firms have strong hold over the market during oligopoly.

Some Disadvantages of Oligopoly are as follows :

1. The biggest disadvantage is “High barriers to entry” – Oligopoly.
2. High degree of intedependence can be seen between firms during oligopoly.
3. Abnormal profits can be made during oligopoly.
4. There are very less chances of economies of scale compared to monopoly.
5. Costly marketing as well as more extensive advertising is needed in oligopoly.
6. In oligopoly small business usually fails to establish themselves because most the market is usually captured by the large firms.
7. Firms cannot take individual decisions and they have to cosider views of other dominant players in the market