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Monopoly vs. Oligopoly: Know the Difference

Shumaila Saeed
By Shumaila Saeed || Published on January 22, 2024
A Monopoly is a market structure where a single firm controls the entire market, while an Oligopoly is a market dominated by a few large firms.
Monopoly vs. Oligopoly

Key Differences

In a Monopoly, a single company has complete control over a particular product or service, with no competition. This contrasts with an Oligopoly, where several firms dominate the market, but none has complete control.
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The presence of a Monopoly leads to higher prices due to lack of competition, whereas in an Oligopoly, while prices can be high, they are typically more competitive due to the presence of multiple firms.
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Innovation in a Monopoly can be limited, as the sole provider faces no competitive pressure. In an Oligopoly, however, firms may innovate to gain a competitive edge over the few other players.
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Entry barriers in a Monopoly are typically very high, preventing new entrants. In an Oligopoly, barriers exist but are not insurmountable, allowing for some competition.
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Monopolies can lead to inefficiencies and consumer dissatisfaction due to lack of choice. Oligopolies, while limited in competition, still offer some variety and service levels due to the presence of multiple players.
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Comparison Chart

Number of Firms

One
Few
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Market Control

Complete control by one firm
Shared control by a few firms
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Competition

None
Limited but present
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Prices

Typically higher
High but more competitive
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Barriers to Entry

Very high
High but not insurmountable
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Monopoly and Oligopoly Definitions

Monopoly

Exclusive control by one company over an entire industry.
The national postal service is a monopoly in many countries.
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Oligopoly

A market dominated by a few large companies.
The automobile industry is an example of an oligopoly.
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Monopoly

A market situation where a single entity dictates terms.
The utility company's monopoly allows it to set high prices.
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Oligopoly

Limited competition among a small number of firms.
In the aviation industry, an oligopoly controls most routes.
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Monopoly

Exclusive control by one group of the means of producing or selling a commodity or service
"Monopoly frequently ... arises from government support or from collusive agreements among individuals" (Milton Friedman).
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Oligopoly

Few firms have significant influence over the market.
The oil industry's oligopoly impacts global fuel prices.
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Monopoly

A company, group, or individual having exclusive control over a commercial activity.
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Jan 06, 2024

Oligopoly

A state of limited competition, with market shared by a few.
Major phone companies form an oligopoly in the telecommunications market.
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Monopoly

A commodity or service so controlled.
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Oligopoly

A market structure with few competitors, each holding significant market share.
The media oligopoly consists of a few corporations owning most news outlets.
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Monopoly

Exclusive possession or control
Arrogantly claims to have a monopoly on the truth.
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Oligopoly

A market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors.
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Monopoly

Something that is exclusively possessed or controlled
Showed that scientific achievement is not a male monopoly.
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Oligopoly

An economic condition in which a small number of sellers exert control over the market of a commodity.
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Monopoly

A situation, by legal privilege or other agreement, in which solely one party (company, cartel etc.) exclusively provides a particular product or service, dominating that market and generally exerting powerful control over it.
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Oligopoly

(economics) a market in which control over the supply of a commodity is in the hands of a small number of producers and each one can influence prices and affect competitors
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Monopoly

An exclusive control over the trade or production of a commodity or service through exclusive possession.
A land monopoly renders its holder(s) nearly almighty in an agricultural society.
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Monopoly

The privilege granting the exclusive right to exert such control.
Granting monopolies in concession constitutes a market-conform alternative to taxation for the state, while the crown sometimes bestowed a monopoly as an outrageous gift.
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Monopoly

(metonymy) The market thus controlled.
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Monopoly

(metonymy) The holder (person, company or other) of such market domination in one of the above manners.
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Monopoly

The exclusive power, or privilege of selling a commodity; the exclusive power, right, or privilege of dealing in some article, or of trading in some market; sole command of the traffic in anything, however obtained; as, the proprietor of a patented article is given a monopoly of its sale for a limited time; chartered trading companies have sometimes had a monopoly of trade with remote regions; a combination of traders may get a monopoly of a particular product.
Raleigh held a monopoly of cards, Essex a monopoly of sweet wines.
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Monopoly

Exclusive possession; as, a monopoly of land.
If I had a monopoly out, they would have part on 't.
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Monopoly

The commodity or other material thing to which the monopoly relates; as, tobacco is a monopoly in France.
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Monopoly

(economics) a market in which there are many buyers but only one seller;
A monopoly on silver
When you have a monopoly you can ask any price you like
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Monopoly

Exclusive control or possession of something;
They have no monopoly on intelligence
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Monopoly

A board game in which players try to gain a monopoly on real estate as pieces advance around the board according to the throw of a die
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Monopoly

The only provider of a particular product or service.
A remote town's only grocery store holds a monopoly.
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Jan 08, 2024

Monopoly

Absence of competition in a market.
The pharmaceutical company's patent created a monopoly.
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Monopoly

Exclusive possession or control of the supply or trade.
The tech giant's monopoly on certain software stifles competition.
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Repeatedly Asked Queries

What is a Monopoly?

A market controlled by a single firm with no competition.
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Jan 22, 2024

Does innovation thrive in a Monopoly?

Not typically, as there's no competitive pressure to innovate.
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Jan 22, 2024

What defines an Oligopoly?

A market dominated by a few large firms.
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Jan 22, 2024

What are barriers to entry in a Monopoly?

Extremely high, often preventing new entrants.
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Can a Monopoly set any price?

Generally, yes, due to lack of competition.
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How does innovation work in an Oligopoly?

Firms often innovate to gain an edge over competitors.
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Can a Monopoly lead to market inefficiencies?

Yes, due to lack of competitive forces.
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Are prices competitive in an Oligopoly?

More so than in a Monopoly, due to limited competition.
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Jan 22, 2024

Are there barriers to entry in an Oligopoly?

Yes, but they're less prohibitive than in a Monopoly.
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Jan 22, 2024

Is customer choice available in a Monopoly?

Very limited, as there's only one provider.
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Jan 22, 2024

How does a Monopoly affect consumers?

Often negatively, with high prices and less choice.
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Jan 22, 2024

What about customer choice in an Oligopoly?

More than in a Monopoly, but still limited.
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Are Oligopolies regulated by governments?

Yes, to prevent anti-competitive practices.
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Can governments regulate Monopolies?

Yes, through antitrust laws and regulations.
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Jan 22, 2024

Is it easier to enter an Oligopoly?

Relatively easier than a Monopoly, but still challenging.
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Jan 22, 2024

Do Oligopolies lead to market inefficiencies?

To some extent, but less so than Monopolies.
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Jan 22, 2024

How does an Oligopoly impact consumers?

Can lead to higher prices, but offers some choice.
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Jan 22, 2024

Can a Monopoly exist legally?

Yes, especially if naturally occurring or government-sanctioned.
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Jan 22, 2024

What's a natural Oligopoly?

It occurs when the market naturally supports few firms due to high costs.
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Can new companies enter a Monopoly?

Very difficult due to high barriers.
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Jan 22, 2024

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Shumaila Saeed
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Shumaila Saeed
Shumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.

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