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Why does an oligopoly only work if there are high barriers to entry in a market?

1 Answer

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An oligopoly is the limitation of competition. If you can keep competitors out of the marketplace, you have more of a chance to make a profit. If you are in a business with a very high capital outlay or you have an extremely well trained labor force that your competitors can't match then you have effectively created or have created for you a very high barrier. Hence an oligopoly.
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User Ben Shmuel
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