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State University, responds:
"Well, the competitive part of the model can fall apart. And we actually have a name for industries where you have only a handful of businesses competing, and we call that as you mentioned "oligopoly." Two good examples, the U.S. auto industry in the 1950s, where you had essentially three or four companies selling all the cars to Americans, and also here more closer to home would be the tobacco companies, the cigarette companies.
"Now, firms in an oligopoly can compete, but the worry is they won't. Instead of competing, they will cooperate. And that cooperation can lead to higher prices for consumers...
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