What is quasi-competitive solution in an oligopoly?

Answer 1

A quasi-competitive solution in an oligopoly refers to a market situation where firms behave competitively despite the presence of few dominant players. In this scenario, companies may set prices and output levels similar to those in a competitive market, often due to pressure from rivals and the threat of potential competition. This behavior can lead to relatively lower prices and higher outputs than in a traditional oligopoly but still higher than in perfect competition due to the limited number of firms. The result is a balance where firms maintain some market power while still feeling incentives to act competitively.