Difference between monopoly and oligopoly

Posted By: Sm Adminon: November 01, 2015In: Miscellaneous

Monopoly:
A monopoly is a market situation in which there is only one seller for a particular product. The entry for the new entrants is highly restricted to enter the market. There are no close substitutes in the monopoly market.
Oligopoly:
An oligopoly is the market situation which is dominated by the small number of sellers. There are no barriers to entry and exit for the firms. There exists the price rigidity. There is lack of uniformity in the size of the firms.
Differences:

Basis	Monopoly	Oligopoly
Definition (www.oxforddictionaries.com)	The exclusive possession or control of the supply of or trade in a commodity or service	A state of limited competition, in which a market is shared by a small number of producers or sellers.
Characteristics/Features	Its features are: There is single seller but large number of buyers. The firm enjoys abnormal profits. There are barriers to entry for the firms. The product has no close substitutes.	Its features are: The firms are interdependent in decision making. The advertising and selling costs play important role. There is price rigidity. There are no barriers to entry for the firms. There is the presence of competition.
Synonyms	Ownership, holding, trust, cartel, patent	Proprietorship, syndicate, consortium, corner, pool
Antonyms	Joint-ownership, sharing, scattering, distribution	Joint-ownership, sharing, scattering, distribution
Types	Its types are: Perfect monopoly Imperfect monopoly Private monopoly Public monopoly Simple monopoly Discriminating monopoly Legal monopoly Natural monopoly Technological monopoly Joint monopoly	Its types are: Pure and perfect oligopoly Imperfect or differentiated oligopoly Collusive oligopoly Non-collusive oligopoly
Word origin	It was originated in the Mid-16th century: via Latin from Greek monopōlion, from monos ‘single’ + pōlein ‘sell’.	It was originated in the Late 19th century: from oligo- ‘small number’, on the pattern of monopoly.
Advantages/Benefits	Its advantages are: Avoids duplication and wastage of resources Enjoys economies of scale Makes a lot of profits Use price discrimination Afford the latest technology	Its advantages are: High profits Simple choices Competitive process Better information and goods
Disadvantages	Its disadvantages are: Poor level of service No consumer sovereignty May charge high prices for the low quality goods Lack of competition	Its disadvantages are: Difficult to forge a spot Less choice Fixed prices are bad for the consumers No fear of competition
Examples	There exists a monopoly market. Microsoft (Operating systems, productivity suites), Google, DeBeers (diamonds), Monsanto (seeds), Long Island Rail Road are the monopoly companies.	We have got an oligopoly on our hands. There is fair pricing in the oligopoly market.