Considerations regarding price in oligopolistic structured markets

Abstract

Economists report price rigidity in markets with oligopolistic structures while explaining the phenomenon. If an oligopolistic firm raises prices, other prices will remain stable in oligopolistic firms, so we will see a significant decrease in sales volume in the firm that increased prices. To avoid this situation an oligopolistic company will not initiate price increases. If oligopolistic firms lower prices, other oligopolistic firms will reduce prices promptly and the result will be that of lower volume of sales - will sell the same physical volume of goods but at a lower price. To avoid this situation, the company will not initiate oligopolistic price decreases.