In microeconomics, how are oligopolistic industries typically characterized in terms of the number of dominant firms and the nature of entry barriers?

Introduction / Context:
Oligopoly is a key market structure studied in microeconomics and business economics. Many real world industries such as airlines, automobiles, cement, telecom and soft drinks show oligopolistic features. Examinations often test whether you understand how oligopoly is defined in terms of the number of firms and the strength of barriers to entry. Getting this definition right is important because it influences pricing power, strategic behaviour and market outcomes.

Given Data / Assumptions:

• The question is about oligopolistic industries in standard microeconomic theory.
• We compare different combinations of number of firms and size of entry barriers.
• We assume a typical textbook setting with profit maximizing firms and well defined markets.

Concept / Approach:
Market structures are usually classified as perfect competition, monopolistic competition, oligopoly and monopoly. The classification is based on number of firms, product type, and entry or exit conditions. In an oligopoly there are only a few large firms that collectively dominate the market. Each firm has enough market power that its decisions affect rivals. Entry barriers are usually substantial so that new competitors cannot easily enter and erode profits. Therefore, when you see a few dominant firms and strong barriers to entry, you should identify the structure as oligopoly.

Step-by-Step Solution:
Step 1: Recall that in perfect competition there are many small firms and no significant entry barriers.Step 2: Recall that in monopoly there is a single firm and very strong entry barriers preventing rivals.Step 3: In monopolistic competition there are many firms each with some product differentiation but entry is relatively easy.Step 4: In oligopoly, unlike the above, only a few large firms dominate sales, and they often interact strategically.Step 5: Oligopoly usually requires substantial entry barriers such as high fixed costs, legal protections, control over key technology or brand strength.Step 6: Therefore the best description from the options is "a few dominant firms and substantial entry barriers".

Verification / Alternative check:
An alternative way to verify is to look at what would happen if entry barriers were low. With low barriers, new firms would continuously enter, increasing the number of competitors and pushing the market towards monopolistic competition rather than oligopoly. Since oligopoly is used for markets that remain concentrated for long periods, substantial barriers are a necessary part of the definition. This confirms that a combination of few firms and substantial entry barriers is the correct description.

Why Other Options Are Wrong:
Option b ("a few dominant firms and low entry barriers") is inconsistent because low entry barriers would encourage many new firms, reducing concentration over time. Option c ("a large number of firms and low entry barriers") better describes perfect or monopolistic competition rather than oligopoly. Option d ("a few dominant firms and no barriers to entry") would not be stable, because without barriers more firms would quickly enter and change the structure. Hence these alternatives do not match the standard definition of oligopoly.

Common Pitfalls:
One common mistake is to focus only on the small number of firms and ignore entry conditions. Another error is to think that oligopoly and monopoly both require a complete block on entry, which is not always true. Oligopolies may face potential entry, but barriers are still strong enough to keep the number of firms small. Students also sometimes confuse oligopoly with monopolistic competition, where there are many firms with differentiated products and relatively easy entry. Carefully linking "few dominant firms" with "substantial entry barriers" helps avoid these misconceptions.

Final Answer:
The correct description of oligopolistic industries is a few dominant firms and substantial entry barriers.