In an oligopoly, only a few companies have a lot of control over the market. This can cause problems for competition, such as:

• Stable Prices: Companies might avoid lowering prices to beat each other. This keeps prices steady, but it’s not great for customers who want good deals.
• Secret Cooperation: Sometimes, companies might secretly work together to set prices or how much they produce. This can make it feel a lot like a monopoly, which is bad for competition.
• Less Innovation: When companies don’t feel pressured to compete, they might stop trying to come up with new ideas or improvements. This means fewer cool advancements for consumers.

These problems can make it hard for new companies to join the market.

But there are ways to encourage more competition:

• Government Rules: Governments can create laws to stop companies from working together in secret. These laws help make sure that competition is fair.
• Welcoming New Companies: By making it easier for new businesses to start, more companies can enter the market. This can boost both competition and new ideas.

In the end, even though competition in oligopolies can be tricky, taking the right steps can help create a better competitive environment.