What is the major difference between monopolistic competition and oligopoly?

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Difference Between Oligopoly vs Monopoly
Head To Head Comparison Between Oligopoly vs Monopoly (Infographics)
Key Differences Between Oligopoly vs Monopoly
Oligopoly vs Monopoly Comparison Table
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Differences Between Monopoly and Oligopoly
Key Differences Between Monopoly and Oligopoly
Comparative Table
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Difference Between Oligopoly vs Monopoly

In a market, one can find various forms of imperfect market competition for several services and products. Oligopoly vs Monopoly are 2 of them, wherein monopoly can be a view for those products and services which will not have any kind of competition, while on the flip side oligopoly can be observed for the products and services with stiffer competition.

Monopoly: Services offered for Transport, Water, Electricity, and so on are practical examples of the monopoly. A monopoly is a type of market condition wherein the only single seller is selling an entire product, which is 3.

Oligopoly: Industries like an automobile, cold drink, telecommunication, etc. can be some of the kinds of industries where an Oligopoly type of competition can be found out. Oligopoly is a kind of market competition, whereby there are a lessor few numbers of sellers or vendors in the marketplace who are selling differential or nearly differential products. In an oligopoly, as stated there are only a few firms or sellers who are operating in the marketplace and so, the sellers or the firms are influenced by the activities of other firms or the sellers

Head To Head Comparison Between Oligopoly vs Monopoly (Infographics)

Below is the top 9 difference between Oligopoly vs Monopoly:

Key Differences Between Oligopoly vs Monopoly

Both Oligopoly vs Monopoly are popular choices in the market; let us discuss some of the major differences :

The major difference between Monopoly vs Oligopoly market is Monopoly will refer to a kind of market that has one seller who is dominating the entire market and on the other side, the economic structure wherein there are a handful or few of firms or sellers in the marketplace who are selling similar or same kind of products and who are competing among themselves is an Oligopoly.
In a monopoly, there is only a single player in the whole marketplace, but in an oligopoly, again the range of players will be from two to ten, in the marketplace.
In a monopoly kind of competition, the seller will dominate the entire market by selling a unique or say specialty product for which there will be no substitute is available. On the contrary, in an oligopoly, the service offered, or the product sold by the firm are either the same or different that have closed or nearby substitutes.
The reasons for restriction on the barriers to the entry in the monopoly market can be economic, legal, or institutional but the major reason for the barrier to the entry in oligopoly kind of competition is economies of scale
In a monopoly the price discrimination does exist, different customers or consumers must pay a different price for the same or similar kind of product. In contrast to the oligopoly, the price will remain fixed for a longer period.
In an oligopoly, the firms or the sellers set their product price based on the price of the similar or the same product which is offered by the rival firm or the seller in the marketplace, which is just flip side in the case of monopoly type of competition, as there are no rivals.

Oligopoly vs Monopoly Comparison Table

Below is the 9 topmost comparison between Oligopoly vs Monopoly

Basis of Comparison	Oligopoly	Monopoly
Basic Definition	An oligopoly is a kind of marketplace that has small or few numbers of relatively large sellers or firms that will produce almost the same and slightly different products. In this kind of market as well there will be significant barriers to entry for other firms or enterprises.	A monopoly is a marketplace that contains one firm that will produce goods which has no close substitute, and further with significant barriers to entry of other sellers or the firms
Number of firms	The count could go from 2 to 10 firms.	There is only a single firm.
Competition	There is little competition here between the firms.	There is no competition
Product type	There is no such fixed bound of a product but depending upon the number there could be no differentiation to substantial differentiation as well.	A monopoly sells a unique and extremely different product
Price determination	Competition or the firm’s direction decides the price of the product.	Consumers’ demand will determine the price of the product.
Entry barriers	Comparatively less than Monopoly but an entry barrier does exist.	The entry barrier is relatively very high here.
Product Pricing	Unlike Monopoly, prices are here fairly charged.	Consumers are charged a very high price.
Pricing controls	Where the Marginal revenue will equal Marginal cost would be optimal pricing for Oligopoly.	Monopoly has its sole control over the pricing of the product.
Competition type	Oligopoly firms may collide with each other rather than compete with one another.	As mentioned there is no competition hence no chance of collusion

Conclusion

Well after reading the above statements one may think that a monopoly kind of competition will never fail but that’s not the case. Take an example of XYZ firm which is trying to sell a product which is very unique in its form but the same product is disliked by the consumers or the customers where it’s trying to sell them and yes that is the scenario where this XYZ firm which is appearing to be dominating but in the end, it will fail miserably and will make losses. So, it’s not always that monopoly competition is successful and does make a profit always.

On the flip side, Oligopoly can collide and become one firm in the industry and remove the price wars and charge their consumers or the customers that they want to. In an oligopoly kind of competition, collusion is one of the most typical infractions to lead to the proceedings that are anti-trust.

E.g. In the year 2012, the Department of Justice in the US sued 6 major book publishers for fixing the price of electronic books.

Differences Between Monopoly and Oligopoly

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Source: Monopoly vs Oligopoly (wallstreetmojo.com)

Key Differences Between Monopoly and Oligopoly

There is a single seller of goods in the market in a monopoly. In an oligopoly, there are few sellers in the market.
There is no competition among the sellers in a monopoly as they are the only ones in the market. In contrast, there are few sellers in the market in an oligopoly, and there is intense competition.
In an oligopoly, the customer has various product choices and is mainly driven by the price, customer preference, and brand loyalty. In contrast, the customer has no option or alternative to pick among the goods in a monopoly.
In an oligopoly, the demand curveDemand Curve is a graphical representation of the relationship between the prices of goods and demand quantity and is usually inversely proportionate. That means higher the price, lower the demand. It determines the law of demand i.e. as the price increases, demand decreases keeping all other things equal.read more of the market is kinked. While, in a monopoly, the demand curve is downward sloping.

In the long run, in an oligopoly market structure, the seller ends up making the normal profitThe term "normal profit" is used when the profit is zero after accounting for both the implicit and explicit expenses, as well as the overall opportunity costs. It happens when all of the resources have been used to their full potential and cannot be put to better use.read more in the industry as any change in the price will be counter-set by the subsequent fall in the cost of the rival firm. Whereas, in the case of monopoly, there is a possibility that the seller can earn abnormal profitsProfit refers to the earnings that an individual or business takes home after all the costs are paid. In economics, the term is associated with monetary gains. read more in the long run.
The price set by the monopoly is generally controlled or monitored by the government to protect the customers’ interests. For example, electricity is an example of a monopoly marketMonopoly is the “one-&-only” seller of a good or service in the market & it faces no competition from any other entity. Generally, it is controlled or monitored by the Government to safeguard the customers’ interests. read more where there is only one producer of goods. On the other hand, oligopoly is driven by private players in the market. For example, a brand of toothpaste has many closely related substitutes, which is an example of an oligopoly market.

Comparative Table

Monopoly	Oligopoly
A market structure is dominated by a single seller of the goods and the services.	A market structure where numerous sellers sell close substitutes of the goods. Large industries generally dominate the market.
The seller controls the price as there is no competition in the market.	The competition in the market determines the price and keeps in mind the competitor’s actions.
This market structure is a high barrier to entry and exit as the industry is generally capital intensive. There are also economic, institutional, or legal restrictions on this kind of industry.	In this market structure, the barrier of entry is generally high because of the economies of scale in the industry.
A firm is a price maker.	A firm is a price taker.
The demand curve of the market is kinked.	The demand curve of the market is downward-sloping.
Electricity, railways, and water are examples of the monopoly market.	FMCG and automobiles are examples of an oligopoly industry.
No competition exists as there is a single seller of the goods.	Intense or high competition among the sellers.