Economies worldwide, and the world economy itself, is divided and into several factions of different markets. Modern markets have standardized money or currency as a medium of transaction, which forms the basis for price.
There are two other important components of the markets that decide the features of certain markets. Any market has two different dimensions, namely, demand and supply. Demand is made by consumers, and it is backed by an ability and willingness to pay. On the other hand, supply is the actual presence of goods or services which can be immediately sold.
The oligopoly market structure is the one where there are a very limited number of sellers, and an infinite number of people demanding goods and services.
A very common and also important feature of oligopoly is that action of, or, on one specific producer will affect the other producers, especially their sales. For example, if a certain producer launches a certain product, it affects other producers and their sales, causing them to react with a new product, which further inflates the market price.
Economic philosophers often criticize oligopoly markets for several different economic problems such as inflation, price hike, materialism, and wrong resource allocation. Irrespective of the small drawbacks, there are several oligopolistic competitions that exist in the world. In fact, as of today, it is the most common form of market.
Examples of Oligopoly Markets
The car market is an apt example of oligopoly. There are a few car manufacturers across the world as against the demand for millions of cars every day. Within some developing nations such as India, there really are very few, actually just a handful manufacturers of cars. The Indian automobile market is considered to be the best example of oligopoly.
There are examples of aircraft manufacturers like Dassault Aviation, Boeing, and Lockheed Martin which are also quite apt. Fighter aircraft manufacturers are however included in the differentiated examples, owing to the fact that the oligopoly is created as a result of government interference. The firearms market also depicts similar features.
The software industry of the early days is an apt example of oligopoly that was dissolved. Earlier, giants such as Microsoft dominated the scene, however, slowly, the number of sellers have increased.
Several times, a consumer-oriented industry such as the food industry or pharmaceutical industry, or wholesale retail chains are connoted to be examples of the oligopolistic market structure.
The geographical and goods differentiation has always managed to spark off a debate, as the subjects of an oligopoly market, that is the goods produced should be similar. However they are not always similar.
Sometimes, airlines markets are also proposed to be oligopolistic business competitions. However, again, the problem of similarity in geographical regions and the similarity of flights flown have made the example a dicey one.
There are several other examples out there which have some debatable features. Some of them also tend to have certain sub-oligopoly markets in one specific geographical region.