Oligopoly is where a few firms dominate an industry. The industry may have quite a few firms or not very many, but the key thing is that a large proportion of the industry's output is shared by just a small number of firms. The product differentiation in oligopolies differ largely depending on the industry. Also the barriers to entry or exit could are differently high or low depending on the industry. The key feature that is common in all oligopolies however is that there is interdependence. As there are just a few firms in an oligopoly, each needs to take careful notice of each other's actions.
Non-collusive oligopoly exists when the firms in an oligopoly do not collude and so have to be very aware of the reactions of other firms when making pricing decisions. In such a non-collusive oligopoly price tends to be quite stable since firms neither like to raise their price nor to lower it. If a firm raises its price, it will lose consumers that will now buy the product from the rivals since their price is lower. If a firm will lower its price, the other firms in this industry will respond to that and will also lower their price in order not to lose consumers. But then another firm will lower its price further, so all the others will also lower their price. This will continue like this until the price is so low that it is beneath the average cost and the firm will experience losses. This is called price war. Due to that the price in non-collusive oligopolies will be quite stable.
But there is also another reason for the rigidity of the price in non-collusive oligopoly: the shape of the MR curve for an oligopoly. The MC curve has a vertical section. This means that if marginal costs were to rise then it is possible that MC would still equal MR and so the firms, being profit maximisers, would not change their prices or outputs. Due to the shape of this MR curve, the MC could rise from MC2 to MC1 and the firm would still be maximizing profits by producing at Q and charging P.
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