an oligopoly is when a market is controlled by a small group of two or more firms. businesses in an oligopoly can agree to price collusion and create barriers to entry for newcomers. if the businesses do not, they would likely be forced to lower their prices and open the market for a newer, smaller firms. for example, osi's foods and ron's munchies dominate the can foods industry in invest america. the product ? companies are carried by all the major department stores and ? in the nation. as both companies maintain market dominance and can effectively set the price of goods, neither business will lower their prices to gain a competitive advantage over the other, although similar products may be priced differently. because they are the two largest producers in the market, the decisions of one firm invaluably affect the decisions of the other. some firms explicitly collude to avoid a price war, as in the case with osi's foods and ron's munchies. while other ? compete through ? their products, it is a careful game play by large companies and one long move could result in a company being pushed out of the market entirely.