Economics Oligopoly Questions
Price maintenance theory in oligopoly refers to the practice where firms in an oligopolistic market collude to maintain a certain price level for their products or services. This theory suggests that firms in an oligopoly may engage in price-fixing agreements or other forms of collusion to prevent price competition and maximize their profits. By setting and maintaining a specific price, these firms can limit price fluctuations and ensure stability in the market. However, such practices are often illegal and can lead to antitrust violations.