MYTUTOR SUBJECT ANSWERS

185 views

What is meant by an oligopoly being both interdependent and uncertain in their price strategies?

Oligopolies are interdependant as the success of their price strategy relies on the reaction of other oligopoly firms in the market. If an oligopoly decided to increase the price of it's output, they would only experience increased revenue if the other firms also increased their price, making the firm dependant on the others.

The aspect of uncertainty follows a similar theory; oligopolies are never certain of how rivals will react - even in the case of collusion. It would be in all firms' best interest to increase their prices as this will also increase everyones revenue, however this is unlikely due to uncertainty. If all firms decided to increase their price but one firm changed their mind, that one firm would capture the market share of all the others as well as taking their revenue potential. This therefore means prices are likely to be stable in oligpolostic markets.

Reubin B. GCSE Maths tutor, A Level Maths tutor, GCSE Economics tutor...

4 months ago

Answered by Reubin, an A Level Economics tutor with MyTutor


Still stuck? Get one-to-one help from a personally interviewed subject specialist

65 SUBJECT SPECIALISTS

£20 /hr

Veleka G.

Degree: Philosophy and Politics (Bachelors) - Durham University

Subjects offered: Economics, History+ 2 more

Economics
History
English Literature
-Personal Statements-

“About Me:My name is Veleka and I'm a first year Philosophy and Politics student at Durham University. I would describe myself as highly energetic and very positive, but I am also very demanding anddedicated to help every student achi...”

£20 /hr

Sonam S.

Degree: Economics (Bachelors) - Warwick University

Subjects offered: Economics, Biology+ 1 more

Economics
Biology
-Personal Statements-

“About me: I am an Economics student at the University of Warwick. I have always enjoyed peer tutoring and have previously been part of a study-buddy mentoring scheme in high school, and decided to continue teaching at University. I lov...”

£20 /hr

Shona S.

Degree: Economics (Bachelors) - Birmingham University

Subjects offered: Economics, Maths+ 1 more

Economics
Maths
Biology

“I am a second year Economics student, studying at University of Birmingham. At school I studied Economics, Maths and Biology for A levels and having enjoyed learning them, so I feel I will be able to enthusiastically teach these subje...”

About the author

£20 /hr

Reubin B.

Degree: Business Economics (Bachelors) - Exeter University

Subjects offered: Economics, Maths+ 1 more

Economics
Maths
Graphic Design

“ABOUT ME I am currently a student at the University of Exeter studying Business Economics. I have a keen interest in all aspects of economics with the passion to guide you through your course, and the hope to inspire the same enthusia...”

MyTutor guarantee

You may also like...

Posts by Reubin

Explain how the diagram for a perfectly competitive firm demonstrates static efficiency.

List and explain some ways in which a monopolistic firm can use it's lower costs as a barrier to entry.

What is meant by an oligopoly being both interdependent and uncertain in their price strategies?

Why might a perfectly competitive firm make abnormal profit in the short run but only normal profit in the long run?

Other A Level Economics questions

What is GDP and is it a useful indicator to measure the standard of living?

Integrate the function f(x) = (1/6)*x^3 + 1/(3*x^2) with respect to x, between x = 1 and x = 3^(1/2), giving your answer in the form a + b*3^(1/2) where a and b are constants to be determined.

What is the best method of structuring an Economics Essay

What are supply side policies? (Including evaluation)

View A Level Economics tutors

Cookies:

We use cookies to improve our service. By continuing to use this website, we'll assume that you're OK with this. Dismiss

mtw:mercury1:status:ok