Chapter 9, Problem 15AA

To determine

To state: The control an oligopoly have over market price.

Answer to Problem 15AA

Oligopoly has a slight influence on the market price.

Explanation of Solution

Oligopoly is the market in which there exists lesser firms selling same or differentiated products. They tend to apply control over price but as there exists lesser number of firms selling mostly same products, when one firm changes the price either increase or decrease, the other firms also follow. Because the consumer has quite few options to explore and compare their products.

Economics Concept Introduction

Introduction: Oligopoly is the market in which there are few sellers and thus all of them exercise a significant influence in the market. It is a form of imperfect competition.