question archive Why does the government seem to worry about oligopolies fixing prices?
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Why does the government seem to worry about oligopolies fixing prices?
The government seems to worry about oligopolies fixing prices because it affects customers and small businesses. Fixing price is a situation where competitors come together and fix a price that may affect other small businesses and customers. Fixing price may result in an increase in the price of the commodities sold by the oligopoly; thus, overcharging the customers while making unreasonable profits. It affects the small businesses because the large businesses can collaborate to close them by lowering the price to the extent that the small businesses cannot make a profit; thus, making them close down since they cannot compete with them anymore.