Due to small profit margins in perfect competition, it is argued that technological development may happen to a greater extent under oligopoly.

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In perfect competition, the presence of many firms and the ease of entry mean that profits are driven to a minimum, leaving little room for investment in research and development. In contrast, oligopolies, with fewer competitors and higher profit margins, have more resources to invest in technological development to gain a competitive edge.

Due to Small Profit Margins in Perfect Competition, It Is