Difference Between Perfect Competition vs. Oligopoly
Difference Between Perfect Competition and Oligopoly
Differences between Perfect Competition and Oligopoly are explained in the below table,
| Features | Perfect Competition | Oligopoly |
|---|---|---|
| Product Features (Across Producers) | Identical Non-Differentiated | Differentiated |
| Industry Entry & Exit Barriers | Very Easy Industry Entry & Exit | High Barriers To Entry But Not Impossible |
| Industry Competition | High | Competitors Act In A Collaborative Manner (Mutually Interdependent) |
| Number Of Producers (Sellers) | Large No Of Producers | Few Large Producers |
| Market Power Of Individual Firm (Ability To Control The Price) | None | High Market Power. Can Influence The Price With Collaborative Manner. |
| Ability To Control The Output | None | Can Influence The Output With Collaborative Manner. |
| Possibility To Earn Super Normal Profits | No Possibility | Possible |
| Individual Producer’s Market Share | Very Low | High |
| Producer’s Possibility To Reach Economies of Scale | Very Low | High |
Differences between Perfect Competition and Oligopoly are explained in the below points,
- Product Features of Perfect Competition is Identical (Non-Differentiated). But in an Oligopoly Product Features are Differentiated.
- Industry Entry & Exit Barriers are Low in Perfect Competition. But comparatively, there are High Barriers To Entry in Oligopoly (But Not Impossible to Enter).
- Industry Competition is high in Perfect Competition. But in Oligopoly Competitors Act in a Collaborative Manner (Mutually Interdependent).
- There are a Large Number of Producers (Sellers) in Perfect Competition. But comparatively, there are Few Large Producers in Oligopoly.
- There is no Market Power of an Individual Firm (Ability To Control The Price) in Perfect Competition. But comparatively, it is High in Oligopoly. Individual firms in Oligopoly can Influence The Price in a Collaborative Manner.
- There is no possibility of Earn Super Normal Profits in Perfect Competition. But it is Possible in Oligopoly.
- There is no ability to control the output in Perfect Competition. But it is Able in Oligopoly with Collaborative Manner.
- Individual Producer’s Market Share is low in Perfect Competition. But Comparatively, it is High in Oligopoly.
- There is a Very Low Individual Producer’s Possibility to Reach Economies of Scale in Perfect Competition But it is High in Oligopoly.
Read More:
Market Structures
Perfect Competition
- Overview, Definition, & Features of Perfect Competition
- Main Characteristics / Causes of Perfect Competition
- Real Examples of Perfect Competition (in USA, Canada, Australia, World)
- Advantages and Disadvantages of Perfect Competition
Oligopoly Market
- Overview, Definition, Types & Features of Oligopoly Market
- Real Examples of Oligopoly Market (in the USA, Canada, World)
- Seven Important Characteristics of Oligopoly Market
- Advantages and Disadvantages of Oligopoly Market
Monopolistic Competition
- Overview, Definition, & Features of Monopolistic Competition
- Main Characteristics / Causes of Monopolistic Competition
- Real Examples of Monopolistic Competition (in USA, Canada, World)
- Advantages and Disadvantages of Monopolistic Competition
Monopoly Market
