What is a key characteristic of oligopolistic markets?

A key characteristic of oligopolistic markets is that they are dominated by a small number of large firms. This limited number of firms means that each one has a significant share of the market and can influence prices and output levels. In an oligopoly, the actions of one firm can directly impact the decisions and profitability of the others, leading to strategic interdependence.

This structure contrasts sharply with other market types. For example, a market with many firms competing typically indicates perfect competition, where no single firm has the power to influence market conditions significantly. Similarly, a market characterized by one firm's dominance points to a monopoly, where a single entity controls supply and pricing. Additionally, oligopolies often have high barriers to entry that prevent new competitors from easily entering the market, which ensures that the few existing firms can maintain their market power and profit margins. Thus, the presence of just a few key firms is what distinctly defines oligopolistic markets.