Mention any two features of Oligopoly

Oligopoly is a market structure characterized by a small number of firms that dominate the market. Here are two key features of an oligopoly:

### 1. Interdependence of Firms

In an oligopoly, the actions of one firm significantly affect the others. Because there are only a few dominant firms, each firm must consider the potential reactions of its competitors when making decisions about pricing, output, and other strategic moves. This interdependence often leads to:

- **Strategic Behavior:** Firms must anticipate how rivals will respond to changes in their own prices, production levels, and marketing strategies.
- **Price Rigidity:** Firms are often hesitant to change prices because a price cut might lead to a price war, while a price increase could result in losing market share to competitors.

### 2. Barriers to Entry

Oligopolistic markets often have significant barriers to entry that prevent new firms from easily entering the market. These barriers can be:

- **Economies of Scale:** Established firms can produce at lower costs due to larger-scale operations, making it difficult for new entrants to compete.
- **High Capital Requirements:** The initial investment needed to enter the market can be substantial, deterring potential competitors.
- **Access to Technology and Patents:** Existing firms may control crucial technologies or hold patents that give them a competitive advantage.
- **Brand Loyalty:** Strong brand identities and customer loyalty make it challenging for new firms to attract customers away from established players.

These features help maintain the market power of the dominant firms in an oligopoly and shape the competitive dynamics of the industry.