Question by erialolita: Is the cell phone market in the USA considered an Oligopoly?
I have to write a paper about something in the news and tie it to microeconomics. I was going to do At&t acquiring T-mobile and how it makes an Oligopoly an even tighter one. I wanted to make sure cellphone companies are considered an oligopoly market
Answer by whirlygig
My business textbook says an Oligopoly is “when an industry has only a handful of sellers. As a general rule, these sellers are quite large. The entry of new competitors is hard because large capital investment is needed.” (p12).
I suppose cell phone cos. qualify since there are only a handful of companies, they are large, and it is difficult to enter because there is a large capital outlay needed to purchase equipment like towers.
What do you think? Answer below!