Oligopoly

An oligopoly is a seller's market having only a few sellers, who enjoy barriers to entry against new competitors. An oligopoly lacks full competition and consumers suffer as a result.

Described another way, an oligopoly is an industry or market dominated by a only few firms selling a similar (undifferentiated) product. This is called a "perfect oligopoly." The few firms can behave in a harmful manner similar to how a monopoly behaves in overcharging customers or otherwise suppressing beneficial competition, since a low number of dominant actors in the market makes it relatively easy for them to collude and form a cartel.

An imperfect oligopoly consists of a few firms in an industry or market, but their product is differentiated, as in the car industry.

The retail gasoline market is a good example of an oligopoly because a small number of firms control a large majority of the market.