Oligopoly is the least understood market structure; consequently, it has
no single, unified theory. Nevertheless, there is some agreement as to what constitutes an oligopolistic market. Three conditions
for oligopoly have been identified. First, an oligopolistic market has only a few large
firms. This condition distinguishes oligopoly from monopoly, in which there is just one firm. Second, an oligopolistic
market has high barriers to entry. This condition distinguishes oligopoly
from perfect competition and monopolistic competition in which there are no barriers to entry. Third, oligopolistic firms
may produce either differentiated or homogeneous products. Examples of oligopolistic
firms include automobile manufacturers, oil producers, steel manufacturers, and passenger airlines.