Dominant firm

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Updated: Aug 20, 2021

A firm that has a significant share of a given market and a significantly larger market share than its next largest rival. Typically, a dominant firm will have a market share of 40 per cent or more. Such a position may be due to significant economies of scale, possession of essential patents, or legal restrictions on entry. It is possible for a firm to lose its dominant position, through anti-monopoly action or technical innovations by smaller rivals.

Reference: Oxford Press Dictonary of Economics, 5th edt.



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