Final answer:
Selling a product at different prices when unrelated to costs constitutes price discrimination, where a monopolist can maximize profits without consumer surplus. Oligopolistic firms may tacitly cooperate by matching price cuts but not price increases to sustain higher prices.
Step-by-step explanation:
Selling a product at different prices when the price difference is unrelated to costs is known as price discrimination. This practice allows a monopolist to sell more output, equivalent to the amount that a perfectly competitive industry would produce. When price discrimination is perfect, there is no consumer surplus; each buyer pays exactly what they believe the product is worth, thus enabling the monopolist to earn the maximum possible profits.
In an oligopolistic market, firms may follow a strategy of matching price cuts but not price increases, which can act as silent cooperation to maintain higher prices and monopoly-level profits without a legally enforceable agreement.