How do suppliers behave in an oligopolistic market when one raises prices?

In an oligopolistic market, a small number of suppliers dominate the industry, and their actions are closely interlinked. When one supplier raises prices, the other suppliers typically respond by following suit and increasing their own prices. This behavior stems from the interdependence characteristic of oligopolistic markets; suppliers are aware that if they do not raise their prices in response, they may suffer from reduced profit margins while the supplier who raised prices could gain an advantage.

By raising prices together, the suppliers maintain their market share and avoid engaging in a price war, which could diminish profits across the board. Such coordination helps sustain the overall profitability in the market despite price increases. This tendency can also create an environment where price changes stick, as consumers do not have significant alternatives. Hence, it's common for suppliers in an oligopoly to act in a way that mimics a coordinated approach to pricing.