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Can you Compare perfect competition and oligopolistic competition?

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Answer:

Perfect competition - imagine thousands of little fruit stands around the country. They all sell the same thing, and they have no control over the price. If one fruit stand raises the price, then no one will go there anymore because it's cheaper somewhere else. If they lower the price, they will just lose money.

Oligopoly - Think about credit cards. You have Visa, Mastercard, American Express, and Discover. All have about the same amount of market power, and each company is very interested in what the other is doing. If one lowers its rates, the others will follow suit.

They are similar in that they have multiple firms that offer similar services/products.

First answer by Er gyanpsingh. Last edit by Er gyanpsingh. Contributor trust: 0 [recommend contributor ]. Question popularity: 2 [recommend question].

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