A key difference between monopoly and oligopoly is that: There are incentives to collude in monopoly, but not in an oligopoly. There are barriers to entry in monopoly, but not in an oligopoly. There is profit maximization in a monopoly but, no profit maximization in an oligopoly. There is one firm in a monopoly, but at least 2 in an oligopoly.

In a monopoly, a single firm dominates the entire market, wielding significant power over pricing and output levels. This firm holds a unique product or service, which creates high barriers to entry for potential competitors, making it nearly impossible for others to enter the market without significant investment or innovation. On the flip side, an oligopoly is characterized by a few firms controlling the market, which can lead to competitive behaviors or collusion among firms. In this environment, companies often monitor each other's actions closely and may engage in price fixing or market sharing strategies to maximize profits collectively, highlighting the dynamic interplay between competition and cooperation.