Introduction The existence of markets is essential in promoting consumption behavior amongst individuals and institutions. Different models define the selling environment or market structures. The four main models include “monopoly, perfect competition, oligopoly, and monopolistic competition” (Hussein 46). These market structures vary from each other based on the degree of product differentiation, ease of entry, and the number of firms in the market. The nature of the market structures has a significant influence on the consumers’ purchasing behavior. A perfect competitive market is the ideal type of market structure. In this type of market structure, “the market is comprised of a large number of small market players offering identical products” (Hussein 73). Other firms can easily enter and exit the market. Moreover, the market is characterized by the existence of perfect knowledge of the products’ prices and the prevailing technology. Subsequenntly, it is impossible for particular sellers to set higher prices for their products as compared to other sellers. However, such a market does not exist in real life situation. One of the most common types of market structures in real life situation is the oligopoly market structure. This market structure is characterized by few industry players that provide identical or differentiated products, high barriers to market entry, and a high rate of interdependence amongst the industry players. Firms in such a market frequently charge high prices for their products, which is highly inefficient as opposed to competitive markets. Subsequently, such firms enjoy abnormal profit levels and they are likely to collude with other industry players. This paper evaluates the existence of oligopoly in individuals’ consumption behaviors coupled with how it affects their daily life. Analysis Factors that motivate the existence of oligopolies The core objective of every business entity is to maximize its profits. Subsequently, firms must ensure that they are effective in setting the price for their products. Most consumers are price sensitive in their purchasing patterns. Subsequently, price constitutes one of the most important elements in the consumers’ decision-making process. Oligopolists are motivated to set high prices for their products by the profit maximization objective. Subsequently, the price level in an oligopoly market is usually higher as compared to the market-clearing price. Additionally, the level of output in an oligopoly is usually lower. Oligopolists have the capacity to produce at an output level higher than that of a monopoly and charge a relatively low price. However, this aspect limits their ability to maximize the level of profitability. These market practices are motivated by the need to gain higher market control. In order to control the market, oligopolies may collude with each other, thus acting like a monopoly. Consider an industry that is comprised of two bakers, viz. X and Y, producing identical breads. Firm X incurs a constant marginal cost of $1 for every loaf of bread produced, while Firm Y incurs a marginal cost of $2 for every loaf of bread. The fixed cost of production in Firm A and Firm B is zero. The difference in marginal cost between the two firms is relatively low. Subsequently, the firms can collude in setting the price of the loaf, hence controlling the market. In a bid to achieve this goal, the