Oligopolists tend to act like monopolists so as to maximize their profits. However, if the oligopolists make individuals decisions the quantity and price of their goods may be affected since they own many firms with limited products, unlike the monopolies. As such, self-interests existing among people in an oligopoly affects their cooperation, and also their stability in the market competition. In short, the oligopolists tend to avoid competition since they comprise of many, but smaller firms. On the other hand, monopolies tend to engage actively in competition due to their free entry and exit. Besides, their goods are highly differentiated so that they can engage in the market competition successfully.
Even though oligopolies try hard to avoid competition in the existing market, policymakers use antitrust laws to prevent them from doing so. Therefore, they end up engaging in a competitive business. On the contrary, policymakers find it difficult to control the monopolist competition. This is because monopolistic competition may be characterized by a standard deadweight loss due to the markup of prices and over the marginal cost. To instill competition, monopolies use their brand names to advertise their products. However, critics argue that the use of brand names only aims at reducing competition.
In this case, monopoly firms tend to have an advantage in the market, especially when they have a mandate from the government to produce a certain product. In such cases, the monopoly may choose to increase or lower prices at their wish since consumers will still buy their products. Sometimes monopolies sell a similar product to different consumers at different prices depending on the willingness to pay the price mentioned. Such price discrimination tends to raise or lower welfare compared to the outcome of a monopoly.