If an oligopolist's several rivals exactly match any price changes it initiates, the demand curve will be less elastic than if its price changes are ignored by its rivals.

Question

Quizplus · Accepted Answer

When rivals match price changes, consumers have less incentive to switch between brands based on price, making the demand for each firm's product less sensitive (or less elastic) to changes in its price.

If an Oligopolist's Several Rivals Exactly Match Any Price Changes