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In an oligopoly small firms compete with each other and firms must be interdependent, the actions of one firm will affect another firm within the same market. The neo-classical theory of oligopoly assumes that there are barriers to entry to the industry. If there were no barriers then firms would enter the industry and take advantage of profits and would also reduce market share of the large firms within the industry...
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If there were no barriers then firms would enter the industry and take advantage of profits and would also reduce market share of the large firms within the industry. Non-price competition is an important feature of oligopoly markets, price in Oligopolistic markets change less then those in a perfectly competitive market this is because firms are often observed to maintain prices at a constant level...
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