What is it called when a small number of companies control more than 40 percent of a market?

1 answer:

6 0

When only a small number of companies control more than 40% of a market, it is correct to say that this market has an oligopoly structure.

<h3 /><h3>Oligopoly</h3>

It corresponds to a system where a sector of the economy has a reduced number of companies offering a good or service. This structure generates the possibility for companies to increase prices and their profits, as this does not correspond to a scenario where there is ample competition.

Therefore, in an oligopolistic market, there is a condition of imperfect competition, that is, it is the middle ground between perfect competition and oligopoly.

Its existence can result in cooperation between companies and even the formation of a cartel, as there is an interdependence between them, as they have controlled costs and efficient production.

Find out more information about oligopoly here:

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