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  • Collusive and Non - Collusive Oligopoly

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    AADYA SHARMA
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    An oligopoly market with few firms exists where each firm recognizes that if it cuts prices, its rivals will likely retaliate by cutting their own prices further, resulting in lower profits for all. However, if a firm raises its price, rivals may not follow to avoid losing sales, allowing the firm that raised prices to earn higher profits. As a result, firms in an oligopoly tend to tacitly collude to keep prices from falling significantly below the market price.

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    Collusive and Non - Collusive oligopoly

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    An oligopoly market with few firms exists where each firm recognizes that if it cuts prices, its rivals will likely retaliate by cutting their own prices further, resulting in lower profits for all. However, if a firm raises its price, rivals may not follow to avoid losing sales, allowing the firm that raised prices to earn higher profits. As a result, firms in an oligopoly tend to tacitly collude to keep prices from falling significantly below the market price.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    112 views5 pages

    Collusive and Non - Collusive Oligopoly

    Uploaded by

    AADYA SHARMA
    An oligopoly market with few firms exists where each firm recognizes that if it cuts prices, its rivals will likely retaliate by cutting their own prices further, resulting in lower profits for all. However, if a firm raises its price, rivals may not follow to avoid losing sales, allowing the firm that raised prices to earn higher profits. As a result, firms in an oligopoly tend to tacitly collude to keep prices from falling significantly below the market price.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Non Collusive Oligopoly

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