Answer:
Following factors lead to the emergence of oligopoly market: (i) Government Licensing The government may grant licenses only to a few firms for the production of a commodity, e.g. coal mining rights are given to some companies only. (ii) Patent Rights Some firms acquire patent rights on account of their innovative product/ technology that restrict the entry of new firms. e.g. A computerised method of running cash management account, being patented by a company. (iii) Scale of Investment Scale of investment for certain products is so high that it becomes difficult for many companies to afford it which leads to concentration of market in the hands of few companies, e g. Software and Automobile Industries. (iv) Cartels Sometimes big companies collaborate or form cartels to gain the control over market. e.g. OPEC set-up in 1960 by the world's five major oil producing countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
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