When a single firm in an oligopolistic market decides to increase output, that firm:

Question

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In an oligopolistic market, when a single firm increases output, it directly experiences both the quantity effect (selling more at a lower price) and the price effect (the price decrease reduces revenue per unit sold). Other firms in the market primarily feel the price effect because the increased output from one firm typically leads to a lower market price, affecting the revenues of competitors without necessarily changing the quantity they sell.

When a Single Firm in an Oligopolistic Market Decides to Increase