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Explain the main features of Oligopoly

Oligopoly is a market structure where only a few large firms dominate a particular industry. In the telecom industry, only a few companies such as Jio, Airtel and BSNL dominate the telecom market. It is an example of an oligopoly market. Some of the main features of oligopoly include:

1. Few firms dominate the market: Oligopoly markets are defined by a small number of firms that have significant market power. These firms are usually large and pose a substantial influence over the industry.

2. Interdependence of firms: In an oligopoly, the actions of one firm can have a significant impact on the others. As a result, firms in an oligopoly are interdependent and must take into account the potential reactions of their competitors when making decisions.

3. Entry Constraints: Oligopoly markets are often complex for new firms due to significant barriers to entry. These barriers can include economies of scale, high start-up costs, and government regulations.

4. Product differentiation: Oligopoly firms often engage in product differentiation strategies to make themselves different from their competitors. This can involve developing unique features or branding their products in a way that makes them stand out in the market.

5. Non-price competition: In an oligopoly, firms often engage in non-price competition, such as advertising or product development, rather than competing solely on price. This can lead to increased innovation and a focus on product quality.

6. Price leadership: In some oligopoly markets, one firm may establish itself as a price leader, with other firms following its pricing decisions. This can result in a relatively stable pricing environment and limit competition and innovation.