Monopoly vs Oligopoly
The terms monopoly and oligopoly are applied to market conditions where a particular industry is controlled by either one or just a few players in such a manner that consumers do not have options or substitute for a product or service and have to face difficulties arising out of such situation. Most people are aware of the world monopoly though even true monopoly is rare to find these days. In most countries, postal department can be termed as monopoly as normally there is no other substitute apart from courier services. Similarly, in some countries, electricity distribution and water supply is in the hands of the government and they control the entire market allowing no competition to others. Oligopoly is similar to monopoly in the sense that instead of just a single player dominating an industry, there are few players who collude to dominate the market. Banking sector was a classic example of oligopoly, people had no option but to bear the inefficiency of public sector banks until private banks came along. However, we will concentrate to differences between the two concepts.
In most of the instances of monopoly or oligopoly, there are artificial barriers that prevent from entering the market. The firm that controls the market does not want others to compete as it enjoys the fruits of being the lone supplier of service or product. The biggest difference between monopoly and oligopoly is that while in monopoly there is a single seller of product or service, in oligopoly, there are few sellers that produce slightly different products and work to keep competitors at bay. They do not let others to emerge as a player in the market and keep their hegemony.
虽然在垄断时无法替代产品或服务,但在寡头垄断的情况下,有一些密切相关的产品。在某些情况下,当公司开始生产与其他产品类似的产品时,该公司从寡头垄断公司转换为垄断公司,但开发了其他人不生产的产品并获得了市场的垄断(例如Microsoft)。在某些情况下,垄断公司像AT&T一样成为一家寡头垄断公司,AT&T是该国电信中唯一的服务提供商,但只是随着Cellular Services出现而进入市场的众多人之一。
There are examples where oligopoly firms work in tandem and close cooperation instead of competition thereby creating a monopoly in the market. It may look like there are several companies providing options but they work or act as one company.
In brief: Monopoly vs Oligopoly • Monopoly is a market condition where there is only one player dominating the market, and consumer has no options • Oligopoly is a situation where there are two or more players dominating the market but substitute products closely resemble each other thus creating a situation which is similar to monopoly. • However, true oligopoly is ideal as it induces competition and brings down prices while at the same time improving the quality of product. |
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