While oligopolies are generally inefficient, limit pricing may keep prices closer to competitive levels.

Name: While oligopolies are generally inefficient, limit pricing may keep prices closer to competitive levels.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Limit pricing is a strategy used by firms in an oligopoly to set prices low enough to deter new entrants, which can result in prices that are closer to those found in more competitive markets.

While Oligopolies Are Generally Inefficient, Limit Pricing May Keep Prices