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An oligopoly describes a market scenario where there are restricted or few sellers. Each seller knows that another seller or sellers will react to its own changes in prices and also quantities. This may cause a kind of chain reaction in a marketplace situation. From the world market there are oligopolies in steel production, automobiles, semi-conductor fabricating, cigarettes, cereals, and also in telecommunications. Frequently times oligopolistic industries provide a similar or equivalent product. These businesses have a tendency to maximize their gains by forming a cartel and acting like a monopoly. A cartel is an association of manufacturers in a specific business that agree to set common rates and output quotas to prevent competition. The bigger the cartel, the more likely it will be that every member will increase output and cause the price of a great to be lower. The majority of time an oligopoly is used describe a world marketnonetheless, the term oligopoly also describes conditions in smaller markets where a few gas stations, grocery stores or alternative restaurants or establishments dominate in their fields. A distinguishing characteristic of an oligopoly is that the interdependence of firms. It follows that any action on the part of a single firm connected to output, price, or quality will cause a reaction on the side of other firms. Many times an oligopoly leads to price leadership between many firms. A price leadership is the practice in many oligopolistic industries in which the largest firm publishes its price list ahead of its competitors. Then these competitors feel the need to match those announced prices so that they lower their prices. This is also termed a parallel pricing. Oligopolies have a tendency to be broken down into one of two distinguished groups. These groups are either a homogeneous or differentiated oligopoly. Homogeneous oligopolies have a standardized product and which include industrial, with petroleum serving as the standardized example, and also services like banking. Differentiated oligopolies, where the products have some differences, are found in consumer goods industries, like cars, biscuits, beer and electrical appliances. There's however another oligopoly in which the manner of the corporation or industry is quite familiar to that of a monopoly. This oligopoly is termed collusive. A collusive oligopoly has the ability to behave in the manner of a m.. .