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What are the sources of oligopoly power?

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Sources of oligopoly power are;

  • When huge capital investment is required / barriers to entry
  • A few firms hold patent that relate to the technique of production of the product.
  • A few controlling a source of raw materials used in the production of the product
  • Some firms may merge with others as takeover
  • A few firms may enjoy large scale economies and offer lower prices for their products thus driving out competitors.
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