Oligopolies are difficult to analyse because

Question

Quizplus · Accepted Answer

Oligopolies are difficult to analyse because it is uncertain how firms will respond to a price change by a rival. This is due to the fact that there are only a few large firms in the industry, and their actions can greatly impact the market. Demand and cost curves do exist for these industries, and while the size of the firms may make analysis more complicated, it is not the main reason for the difficulty in analysing oligopolies. Finally, oligopolies have been studied by economists for many years, so it is not accurate to say that they are a recent development and therefore lack models for analysis.

Oligopolies Are Difficult to Analyse Because