2 Why are firms in oligopoly interdependent? Economics in Action above shows some examples of oligopoly. The dividing line between oligopoly and monopolistic competition is hard to pin down. As a practical matter, we try to identify oligopoly by looking at the five-firm concentration ratio qualified with other information about the geographical scope of the market and barriers to entry. A concentration ratio that divides oligopoly from monopolistic competition is generally taken to be 60 per cent. A market in which the concentration ratio exceeds 60 per cent is usually an example of oligopoly and a market in which the concentration ratio is below 60 per cent is monopolistic competition.