Oligopoly Pricing Strategies

Oligopoly pricing strategies refer to how companies in a market with few competitors set their prices. These firms are interdependent; the pricing decisions of one company directly affect others. Common strategies include price collusion, where companies secretly agree to set similar prices, and price wars, where they aggressively lower prices to gain market share. Other strategies might involve "price leadership," where one dominant firm sets the price, and others follow. Because of the limited number of players, these strategies can lead to higher prices and less competition compared to more competitive market structures.