FedEx operates in an oligopoly. This market structure is characterized by a small number of firms that dominate the market. In the case of FedEx, it competes with a few other major players in the shipping and logistics industry, such as UPS and DHL. These companies have significant market power and influence pricing, which is a key feature of oligopolies.
The competition in an oligopoly is not just about price; firms often engage in non-price competition as well, through marketing and improving service. This can be seen in how FedEx and its competitors offer a variety of shipping options, delivery guarantees, and tracking technologies to attract and retain customers.
In contrast, a perfect competition market would have many companies offering identical products, a monopoly would mean one firm controls the market entirely, and monopolistic competition involves many firms selling products that are differentiated from one another. Therefore, considering the characteristics of FedEx and its market environment, it fits best within an oligopoly.