But if the firm raises its price, the other firms will stand at their level, not raising price. The other firms hope to steal customers away from the firm with the increased price. This is way some oligopoly prices tend to remain unchanged even in the face of changing costs. Oligopoly vs. Perfect Competition Because of all the different types of oligopoly behavior, you can t have an easy comparison. We have generalizations.
Price is usually higher under the oligopoly market.
The oligopoly firm operates at excess capacity so their price is typically higher than the perfectly competitive firm. In times of a price war, it is possible that the price could be lower under the oligopoly for that time period. Profits tend to be higher under oligopoly. With the barriers to entry, economic profit can be earned in the long run. We expect the profit rates of oligopoly firms to be higher than those that operate under the perfectly competitive model.