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प्रश्न
Why is the number of firms small in oligopoly? Explain.
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उत्तर
In an oligopoly market, each firm is huge enough to control a significant portion of the market even though they are few firms. Output quotas and the price have a direct bearing on the output and price of rival firms in the market. So, there is no unique demand curve for an oligopoly firm. They form a collusive agreement among the firms to fix the price and output in the market. It is in order to avoid price competition and earn monopoly profits.
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