How Do Oligopolies Set Their Prices. If it lowers its price, then the other firms will match the lower price, causing all the firms to earn less profit. In an oligopoly, all firms would need to collude in order to raise prices and realize a higher economic profit.
See also what is averaging down options? In an oligopoly, a small number of vendors supply a significant part of the market's items. Correspondingly, how does an oligopoly set prices?
What Is a Competitive and Free Marketplace? ToughNickel
In oligopoly, some companies have large market shares and can thus affect prices. If it lowers its price, then the other firms will match the lower price, causing all the firms to earn less profit. Indeed, if there is a general price increase in the inputs of an industry, then all firms will surely increase their prices. Although only a few firms dominate, it is possible that many small firms may also operate in the market.
