In an oligopoly, several large corporations dominate the market, although there may be some smaller players. The soft drink (soda) industry is a good example of an oligopoly. Pepsi and Coke dominate. Faygo might be really good and popular in the Midwest, but it does not have much influence over the market. In reality, an oligopoly only needs two or more businesses to earn the definition, so the cell phone business is another good example. Even though Vodafone and some others are prevalent in Africa and China, in the overall global market, Verizon, AT&T, and T-Mobile have the most influence over price and production domestically.
There are three main characteristics of an oligopoly:
1. Two or more large firms must dominate the industry.
2. These companies sell identical products.
3. There are significant challenges to entering this market (not everyone can join).
For more information, visit the OECD (Organization for Economic Cooperation and Development) at the link below.