Disadvantages.
- Resource misallocation and duplication may arise due to unnecessary competition among firms.
- High costs of advertising are incurred in a bid to keep its market share.
- Prices in oligopoly are normally higher than the average cost. This implies consumer exploitation.
- Artificial barriers created by existing firms discourage private investment hence retarding economic growth and development.
- In case of cartel arrangements, monopolists are created by oligopoly.
- Firms operate at excess capacity hence resource under utilization.