Economics Oligopoly Questions
The price maintenance model in oligopoly refers to a situation where firms in an oligopolistic market collude to maintain a certain price level for their products or services. This collusion can be explicit or implicit and is aimed at maximizing profits for all firms involved. By agreeing to set a specific price, the firms reduce price competition among themselves, leading to higher profits. However, this practice is often illegal and considered anti-competitive behavior in many countries.