Homework Help: Economics

Posted by Econo_Help on Sunday, November 4, 2007 at 1:54pm.

can someone please help me with this question?

Testifying at a price fixing trial involving Cargill Corp. and the market for chicken growth hormone, (in which Cargill is one of only three firms worldwide), an executive for Perdue said: "It's an oligopoly. When one (firm) changes price, they all do and usually within minutes."

Why is it not surprising to find that in an oligopoly with very few firms each of which sells a basically undifferentiated product like chicken growth hormone, all the firms change prices simultaneously, even if there is no explicit price fixing?

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