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Because the goods are identical, however, firms must charge the same price, and no economic profit is made. If all the firms in the market could make an agreement to uniformly cut output and charge an equally higher price, they would all profit. Olson explains the reason firms do not come to such an agreement. All competing firms wish to sell as much as they can, but as they sell more, the cost of producing the good eventually exceeds the price of the good. According to Olson (2004: 9), "Each firm's interest is directly opposed to that of every other firm, for the more the firms sell, the lower the price and income for any given firm...
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