Economics Oligopoly Questions
Price bundling theory in oligopoly refers to a pricing strategy where multiple products or services are offered together as a package at a discounted price. This strategy is commonly used by firms in an oligopolistic market structure to increase their market power and differentiate their offerings from competitors. By bundling products together, firms can potentially attract more customers, increase sales, and achieve economies of scale. Additionally, price bundling can also help firms to reduce price competition and maintain higher profit margins in the oligopoly market.