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Mention the types of oligopoly.

Mention the types of oligopoly.

Solution

Oligopoly can be classified in two ways — by the nature of the product and by the behaviour of firms.

  1. By product: pure (perfect) oligopoly, where firms sell a homogeneous product, and differentiated (imperfect) oligopoly, where firms sell differentiated products.
  2. By firms' conduct: collusive oligopoly, where firms make agreements (formal or secret) to pursue common interests, and non-collusive oligopoly, where firms act independently and compete while anticipating rivals' moves.

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