Monopolistic competition, an imperfect form of competition in which many firms sell trivially distinguishable but unsubstitutable goods, and an oligopoly, where a small number of firms dominate a specific market, have several key similarities.
The first is that there are generally many consumers in the market. It is also possible, despite being somewhat counter-intuitive, that there may also be many producers under both systems. While an oligopoly is dominated by a small number of producers, there are normally many smaller firms in existence that simple lack a controlling market share. The second is the capacity of the firms to control pricing. The firms of an oligopoly are inherently price setters, and the dominant firms of a monopolistic market generally take their competitors prices as a given, and ignore any impact their prices might have on the prices of competitors. This non-price competition places exclusive incentive of the maximization of profits. A final potential similarity is the production of heterogeneous competing products, although it is possible for such products in a oligopoly to be largely homogeneous.