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Oligopoly Pricing - Morrisons and M&S follow rivals to cut food prices

Graham Watson

20th June 2023

Classic oligopoly theory - with Morrisons and Marks and Spencer cutting the price of basic items in response to similar cuts by Tesco, Sainsburys and Aldi.

It's a classic example of how an oligopoly. In general, there's price stability but when prices change, they tend to go to in the same direction. It might be that this is the result of collusion, or price leadership, but, it's economically rational for firms to follow the herd.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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