Is it legal for firms to fix prices together in oligopolistic markets?

In oligopolistic markets, a small number of firms dominate the industry, and they often have significant market power. Price-fixing, which involves firms collaborating to set prices at a certain level rather than allowing market forces to determine them, is considered illegal under antitrust laws in many jurisdictions, including the United States. This practice restricts competition and harms consumers by leading to higher prices and reduced choices.

When firms engage in price-fixing, they violate the principles of fair competition that are meant to benefit consumers. Antitrust laws are designed to promote competition and prohibit agreements that unreasonably restrain trade. The legal framework in many countries explicitly prohibits collusion in pricing among competitors, emphasizing that such actions undermine the market's ability to function effectively.

Consequently, price-fixing is deemed illegal in oligopolistic markets, reinforcing the importance of competition and consumer rights within the economy.