Oligopoly firms may behave in the following three ways:

i) Cartel - In order to avoid undue competition, oligopolistic firms may engage in formal agreements or contracts. With help of forming cartels the firms will not only maximise their total profits together, but also capture a significant market portion.

ii) Barriers to the entry of new firms - It may happen that existing firms try to adopt entry preventing price, which restricts the entry of new firms into oligopoly market. Every producer believes in sales maximisation policy instead of profit maximisation while determining prices.

iii) Advertisement and differentiated product - It may happen that the firms realise that price competition will leave them nowhere and consequently they emphasise more on advertising their products and making their products unique from that of the competitors’. It will enable them to capture the minds of consumers and indirectly increase their market portion.