Monopolies, Duopolies, and Oligopolies

Monopolies, duopolies, and oligopolies all represent market structures that deviate from perfect competition and in which production decisions by any single firm directly affect the sales or selling price of other firms. In these types of markets, the limited number of sellers that exist maintain some control over the price of the goods or services sold, and these goods or services are either unique or significantly differentiated from other potential competitors in the market. As with all market structures that deviate from perfectly competitive markets, firms in these markets will tend to restrict output in their efforts to increase prices above marginal cost and thereby reduce the efficiency of the marketplace. The loss in efficiency in the markets is associated with a misallocation of society's ...