The main reason for small number of firms under Oligopoly is the Barriers to entry, which prevent entry of new firms into the industry. Patents, requirement of large capital, control over crucial raw materials, etc, are some some of the other reasons, which prevent new firms from entering into industry. As a result, there are few firms in an Oligopoly market.
Why is number of firms small in an oligopoly market?
Answers
Ajit Tiwari
The main reason for small number of firms under Oligopoly is the Barriers to entry, which prevent entry of new firms into the industry. Patents, requirement of large capital, control over crucial raw materials, etc, are some some of the other reasons, which prevent new firms from entering into industry. As a result, there are few firms in an Oligopoly market.