exports. Such agreements, however, because they fall in a gray area of international law, are not legally

enforceable. If Nigeria, for example, decides to start cutting prices and selling more oil, Saudi Arabia cannot

sue Nigeria in court and force it to stop.

LINK IT UP

Visit the Organization of the Petroleum Exporting Countries website (http://openstax.org/l/OPEC) and learn

more about its history and how it defines itself.

Because oligopolists cannot sign a legally enforceable contract to act like a monopoly, the firms may instead

keep close tabs on what other firms are producing and charging. Alternatively, oligopolists may choose to act

in a way that generates pressure on each firm to stick to its agreed quantity of output.

One example of the pressure these firms can exert on one another is the kinked demand curve, in which

competing oligopoly firms commit to match price cuts, but not price increases. Figure 10.5 shows this
{"file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "uploaded_via": "batch_uploader", "title": "Principles of Microeconomics 3e", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "total_pages": 597, "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "producer": "Prince 14.2 (www.princexml.com)", "batch_upload": true, "creationdate": "2022-12-07T14:15:44-06:00", "file_type": ".pdf", "moddate": "2022-12-07T14:23:05-06:00", "file_name": "Microeconomics3e.pdf", "creator": "PDFMiner", "upload_timestamp": "2026-02-07T15:24:38.309401", "file_size_mb": 26.99}