In which type of market structure is the consumer unlikely to benefit from price competition?

In an oligopoly market structure, a few firms dominate the market, and they often have significant control over prices due to their market power. Unlike in perfectly competitive markets where there are many firms and prices are driven down by competition, firms in an oligopoly may engage in tacit or explicit collusion, leading to higher prices and reduced price competition. Consumers may not benefit from lower prices or improved services because firms in an oligopoly often prioritize maintaining their market share and profitability over aggressive price competition.

In contrast, perfect competition typically results in lower prices for consumers due to many firms competing to attract buyers. Monopolistic competition allows for some degree of price competition as firms compete on product differentiation, while in a perfect monopoly, one firm controls the entire market. However, even in a monopoly, consumer welfare may also be compromised, but not due to price competition—rather, due to the lack of alternative choices. Thus, oligopoly is the market structure where consumers are least likely to experience the benefits of price competition.