Types of oligopoly
Pure/perfect and differentiated/imperfect oligopolies: Pure oligopoly is when the product is homogeneous in nature.
Example: Aluminium industry.
Differentiated or imperfect oligopoly is based on product differentiation. Example - automobile industry.
Open and closed oligopolies
In open oligopoly, there is free entry and exit of firms. Whereas, in closed oligopoly, entry is restricted.
Collusive and competitive oligopolies
When firms of an oligopolistic market come to a common understanding or act in collusion with each other in fixing price and output, it is collusive oligopoly. On the other hand, when there is a lack of understanding between the firms and they compete with each other, it is known as competitive oligopoly.
Partial or full oligopolies
When there is one dominating leader firm, it would be the price leader and is known as partial oligopoly. In full oligopoly, the market will be conspicuous by the absence of price leadership.
Syndicated and organized oligopolies
When firms sell their products through a centralized syndicate, it is known as syndicated oligopoly. On the other hand, where the firms have a central association for fixing prices, output etc., it is referred to as organized oligopoly.