A COMPARISON OF FOUR MARKET STRUCTURES BASED UPON THE DEGREE OF COMPETITION. PERFECT COMPETITION MONOPOLY OLIGOPOLY MONOPOLISTIC COMPETITION. OLIGOPOLY. NUMBER OF FIRMS. A FEW LARGE FIRMS (AT LEAST TWO) FOUR FIRM CONCENTRATION RATIO
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If the combination of market share of the four largest firms in an industry is equal to or greater than 40%, the industry is considered an oligopoly.
(1) Oligopoly firms collaborate to charge the monopoly price and get monopoly profits (price leader).
(2) Oligopoly firms compete on price so that price and profits will be the same as a competitive industry.
(3) Oligopoly prices and profits will be between the monopoly and competitive ends of the scale.
(4) Oligopoly prices and profits are "indeterminate" because of the difficulties in modeling interdependent price and output decisions.