Final answer:
Oligopoly is a market structure in which a small number of firms dominate the market and make strategic decisions based on the actions of other firms. Examples include the commercial aircraft and soft drink industries.
Step-by-step explanation:
Oligopoly is a type of market structure in which a small number of firms dominate the market. These firms have significant market share and often face high barriers to entry, making it difficult for new firms to enter the market. An example of an oligopoly is the commercial aircraft industry, where Boeing and Airbus each produce slightly less than 50% of the large commercial aircraft in the world. Another example is the U.S. soft drink industry, dominated by Coca-Cola and Pepsi.
In oligopolistic markets, firms strategically make decisions regarding output, pricing, and other factors based on the actions of other firms in the market. They can choose to collaborate and act as if they were a single monopoly or individually compete by expanding output levels and cutting prices to gain profits. Oligopolistic markets and firms can exhibit characteristics of both monopoly and perfect competition.