An oligopoly is a market in which relatively few sellers supply many buyers, each seller recognising that he can control his prices to a certain extent and that his competitors' actions will influence his profits. This is a departure from the assumption, in perfect competition, that there are a large number of firms in any particular market. If there are only a few firms, each one may be able to influence the market price by controlling the amount they produce, thus earning higher profits.
Oligopoly is a common feature of the real world; studies have shown that in developed countries markets tend to become more oligopolistic. There is some doubt, however, as to whether prices really are higher under oligopoly. Research Oligopoly
Abbreviations
Money
Research Oligopoly