Oligopolies are industries in which only a handful of sellers exist. Many major manufacturing industries are oligopolies, with automobile production being a prime example. The barriers to entry may include very large economies of scale that make it economically impossible to sustain a number of competitors each producing at or near minimum efficient scale. This situation makes game theory a very useful approach for studying oligopoly. However, unlike monopoly and perfect competition, there is no single model that captures the relevant features for oligopoly, making it both difficult but in many ways more interesting to study.
Monopolistic competition combines elements of both perfect competition and monopoly.
Specifically, monopolistic competition is similar to perfect competition in that there are many buyers and sellers, and free entry and exit. The key difference, however, is that firms in monopolistic competition produce differentiated goods, giving each producer a small degree of power over price, or market power. In this sense, monopolistic competitors face downward sloping demand curves and make decisions like monopolists, with similar results. Products can be differentiated in many ways. For example, fast food restaurants sell similar but somewhat differentiated hamburgers.