The difference between collusive and non-collusive oligopoly
Oligopolies either collude — secretly agreeing with rivals to fix prices or output — or compete independently against each other. These two paths produce very different market outcomes for consumers and firms.
Real World
OPEC is the classic collusive oligopoly: member nations agree to restrict oil output to keep prices high. By contrast, Amazon and Walmart compete fiercely on price without coordination, exemplifying non-collusive oligopoly.
Exam Focus
Always state the consequence for consumers — collusion raises prices; non-collusive rivalry can lower them — to secure evaluation marks.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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