<P> With few sellers, each oligopolist is likely to be aware of the actions of the others . According to game theory, the decisions of one firm therefore influence and are influenced by decisions of other firms . Strategic planning by oligopolists needs to take into account the likely responses of the other market . Entry Barriers: High investment required . Strong consumer loyality for existing brand . Economics of scale . </P> <P> Oligopoly is a common market form where a number of firms are in competition . As a quantitative description of oligopoly, the four - firm concentration ratio is often utilized . This measure expresses, as a percentage, the market share of the four largest firms in any particular industry . For example, as of fourth quarter 2008, if we combine total market share of Verizon Wireless, AT&T, Sprint, and T - Mobile, we see that these firms, together, control 97% of the U.S. cellular telephone market . </P> <P> Oligopolistic competition can give rise to both wide - ranging and diverse outcomes . In some situations, particular companies may employ restrictive trade practices (collusion, market sharing etc .) in order to inflate prices and restrict production in much the same way that a monopoly does . Whenever there is a formal agreement for such collusion, between companies that usually compete with one another, this practice is known as a cartel . A prime example of such a cartel is OPEC, which has a profound influence on the international price of oil . </P> <P> Firms often collude in an attempt to stabilize unstable markets, so as to reduce the risks inherent in these markets for investment and product development . There are legal restrictions on such collusion in most countries . There does not have to be a formal agreement for collusion to take place (although for the act to be illegal there must be actual communication between companies)--for example, in some industries there may be an acknowledged market leader which informally sets prices to which other producers respond, known as price leadership . </P>

The network of suppliers needed to make a particular product is known as