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The route to oligopoly has been through mergers ( examples: steel in the early history, and more recently, airlines, banking, and entertainment). The merging or combining of two or more competing firms may substantially increase their market share and this in turn may allow the new firm to achieve greater economies of scale.
Oligopolies often set price through collusion. By controlling price through collusion, oligopolists may be able to reduce uncertainty, increase profits, and perhaps even prohibit the entry of new rivals.
What impact has the internet had on collusive tendencies? Provide an example.
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