As oligopolists are reluctant to engage in price competition, there is an opportunity for monopolistic profits to accrue to the small number of firms in the market.
In an oligopolistic market, each firm is large enough to affect prices but none holds an uncontested monopoly position. "While limited price competition may occur among sellers in an
oligopoly, a single large producer may assume a leadership position in establishing prices or terms of sale that the other firms will tacitly follow. When concerned action or collusion occurs among oligopolistic firms, the association is known as a cartel."
(Institute for Trade and Commercial Diplomacy,
Oligopoly,
Economic & Commercial Concepts & Terms, 2004, visited 2011-03-101)