The smaller the share of the fringe firms in an oligopoly market, the smaller will be the profit earned by the dominant firm.

Question

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In an oligopoly, the dominant firm's profit is not necessarily smaller when the fringe firms have a smaller share of the market. Often, a smaller share for fringe firms means less competition for the dominant firm, potentially allowing it to earn more profit through higher prices or greater market share.

The Smaller the Share of the Fringe Firms in an Oligopoly