ABSTRACT
Pricing in markets which are oligopolistic in nature being served by only a handful of large giants takes one of two forms. Either there seems to be a tacit understanding in such markets so that price competition never seems to break out. Profits on highly specialized products, particularly those which can be patented, tend to be very high and prices get nearer to what the market is willing to bear. The selling prices at which a company trades in a market usually shape its marketing and product strategy and condition the way in which it behaves in the market. Price-fights seldom start in markets which are dominated by one or two large companies unless the two companies fight it out between themselves. The standard economic theory that prices tends to rise when demand goes up and drops when demand goes down is often confounded by actual behavior in the market place.
