The term “oligopoly” refers to a small number of producers that work directly or indirectly to limit output and/or fix prices in order to achieve above-normal market profits.
Economic, legal and technological factors can contribute to the formation and maintenance or elimination of oligopolies.
The main difficulty faced by oligopolies is the prisoner’s dilemma that each member faces, which encourages each member to cheat.
Government policies may discourage or encourage oligopolistic behavior, and firms in mixed economies often seek government blessings for ways to limit competition.