<p>When there are few big firms and many smaller firms with a small market share, economists speak about a market with a competitive fringe. The smaller firms are price takers, have higher marginal and average costs and a lower markup than bigger firms. They have often a lower rate of profit than big firms. Although markets with heterogeneous firms are often not presented in textbooks, the economic literature is full with contributions investigating heterogenous firms. This is more realistic, but somewhat more complicated than the homogenous firm framework. Existence and unicity of the short- and long-run equilibrium are not always guaranteed.<br>
Small firms survive because they have often smaller sunk costs (entry and exit costs) than larger firms, and often pay lower wages.</p>

CC BY-SA 4.0
2019-02-25T10:42:52.447Z
2019-02-25T13:39:36.393Z
2019-02-25T13:39:36.393Z
Bertrand
<p>How do small firms survive in an oligopoly if large firms already dominate a huge amount of market share in the market? in terms of the supermarket industry between large supermarkets and small grocery stores around the country. </p>

CC BY-SA 4.0
2019-02-25T07:51:52.593Z
What do you mean by "control"?
Giskard
CC BY-SA 4.0
2019-02-25T07:58:07.583Z
That they already have high market share of the industry
lookbehind
<oligopoly>
How do small firms survive in an oligopoly?
lookbehind
# How do small firms survive in an oligopoly?

(Asked by: username_0 on 2019-02-25)

How do small firms survive in an oligopoly if large firms already dominate a huge amount of market share in the market? in terms of the supermarket industry between large supermarkets and small grocery stores around the country.

**Tags:** oligopoly
> **Comments:**
> **username_1**: What do you mean by "control"?  
> **username_0**: That they already have high market share of the industry  

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## 1 answers

### Answer by username_2 on 2019-02-25. Score: 6

When there are few big firms and many smaller firms with a small market share, economists speak about a market with a competitive fringe. The smaller firms are price takers, have higher marginal and average costs and a lower markup than bigger firms. They have often a lower rate of profit than big firms. Although markets with heterogeneous firms are often not presented in textbooks, the economic literature is full with contributions investigating heterogenous firms. This is more realistic, but somewhat more complicated than the homogenous firm framework. Existence and unicity of the short- and long-run equilibrium are not always guaranteed.  
Small firms survive because they have often smaller sunk costs (entry and exit costs) than larger firms, and often pay lower wages.


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