Since the manufacture of breakfast cereal is dominated by only few companies which altogether have 90% sales, it is an example of oligopoly.
Oligopolistic markets are characterized by a small number of suppliers. They can be found in all countries and in a wide range of industries. Some oligopoly markets are highly competitive, while others are significantly less so, or appear to be. Competition authorities are frequently asked to look into allegations of coordinated actions or a lack of vigorous competition.
Firms in an oligopoly set prices, whether collectively (in a cartel) or individually (under the leadership of one firm), rather than taking market prices. As a result, profit margins are higher than they would be in a more competitive market.
High entry costs in capital expenditures, legal privilege (license to use wireless spectrum or land for railroads), and a platform that gains value with more customers are the conditions that allow oligopolies to exist (such as social media).
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