So far, we've been assuming that firms charge the same price to all their customers. In some real-world markets, firms use price discrimination to charge different customers different prices. Also, in some real-world markets, firms are interdependent. That is, the actions of one firm have a noticeable effect on other firms, and these other firms are likely to react. Interdependence makes it more difficult for firms to choose a profit-maximizing pricing strategy.
Firms often cooperate with other competitors in their market.
Cooperation frequently enables firms to retain economic profits that would be lost if the firms actively competed with each other. Cooperation can take many forms, from formal cartels where sellers get together and jointly set prices and divide markets, to informal collusion or price leadership. Although competitive markets work well for consumers, many real-world markets are not very competitive. Firms in these markets may cooperate with each other to increase their profits by raising prices. In these cases, the government may interfere with the decisions of firms by making the firms act in ways that are more competitive.