Community and Government

Oligopoly Definition: How an Oligopoly Works

Written by MasterClass

Last updated: Oct 13, 2022 • 3 min read

An oligopoly is a collection of multiple companies in the same industry working together to fix prices to ultimately earn higher profits and discourage lower prices. The market power of an oligopoly is such that it bars entry to new firms, limiting competition, and is generally bad for consumers because it causes higher prices.