Two characteristics of oligopoly pricing that have frequently been observed are that
A) oligopolistic prices tend to be "sticky" or inflexible, and when the firms do change their prices, they tend to do so together.
B) oligopolistic firms' prices tend to fluctuate a lot, and these prices tend to move together with each other.
C) oligopolists tend to practice a lot of price discrimination, and there tends to be a wide variance in oligopoly pricing.
D) oligopolistic firms' prices tend to fluctuate a lot, and there tends to be a wide variance in oligopoly pricing.

Question

Quizplus · Accepted Answer

Oligopolistic firms tend to have interdependent pricing strategies, meaning they are more likely to coordinate and match their pricing decisions. This results in "sticky" or inflexible prices, where changes in price are rare and tend to occur simultaneously among all firms in the industry. This behavior is known as price rigidity.

Two Characteristics of Oligopoly Pricing That Have Frequently Been Observed