BharatNotes Oligopoly
noun (countable)Usage in a UPSC answer
Following the consolidation of India's telecom sector to effectively three viable operators by 2023, competition economists debated whether the resulting oligopoly had raised the average revenue per user (ARPU) floor at the expense of consumer welfare.
Synonyms
Antonyms
Word Family
oligopolist (noun), oligopolistic (adjective), oligopoly (noun), duopoly (related noun)
Root
Greek oligos = few + pōlein = to sell; parallel to mono-poly but with plural sellers
Etymology
Coined from Greek roots (oligos = few, pōlein = to sell) by analogy with monopoly, the term gained formal economic usage in the 19th century. Cournot's 1838 work on duopoly (two sellers) was the mathematical precursor; the broader 'oligopoly' term and game-theoretic analysis of interdependence were developed by 20th-century economists including Nash (Nash Equilibrium, 1950), Bertrand, and Stackelberg.
Memory Hook
OLIGO = few (as in oligarchy = few rulers); POLY = sellers. A few firms rule the market like an oligarchy rules a state — and just as oligarchs eye each other's moves, oligopolists watch rivals' prices obsessively.
How This Word Works in UPSC Writing
A market dominated by a small number of sellers, each large enough that its decisions affect the others. The defining feature to state is strategic interdependence: firms must anticipate rivals' reactions, which is why oligopoly is analysed with game theory and why outcomes range from intense price competition to tacit collusion. That indeterminacy is the point, and answers asserting that oligopoly is simply anti-competitive miss it.
Don’t Confuse It With
Oligopoly has a few interdependent sellers. Monopoly has one. Monopolistic competition has many sellers with differentiated products and little interdependence. Cartel is an explicit agreement to coordinate, which is unlawful, as against the tacit coordination oligopoly may produce without agreement.
Hindi Meaning
अल्पाधिकार (alpādhikār).
Common Questions
- What is an oligopoly?
- A market dominated by a small number of sellers, each large enough that its decisions affect the others.
- What makes oligopoly distinctive?
- Strategic interdependence. Each firm must anticipate how rivals will respond, which is why outcomes range from fierce price competition to tacit coordination.
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