Sub: Economics Topic: Micro Economics
Question:
An explanation of why there’s an inherent conflict in the joint and individual
interests of oligopolists
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Explain the following statement: “There’s an inherent conflict in the joint and individual
interests of oligopolists.
Solution:
Explain the following statement: “There’s an inherent conflict in the joint and individual
interests of oligopolist.
There is always an inherent conflict in the joint and individual interests of oligopolies
because each oligopolies wants industry profits to be maximized. Each oligopolistic wants to
maximize it’s own market share. Even though there is collusion in the market each firm might
try to cheat each other if there is any chance. When they follow price leadership, the high
market share might follow unfair pricing policy to reduce profit of the rivalry firms. Thus, in the
oligopolistic market there is always conflict.
** End of the Solution **
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