In an oligopoly market, producers often make agreements to restrict competition in order to maintain their market power and profits. This can take many forms, such as price-fixing, output restrictions, and market sharing agreements. While such agreements may benefit the producers involved, they often result in higher prices and reduced choices for consumers, as well as decreased innovation and economic growth.

Price-fixing is one common tactic used by oligopolistic producers to maintain high prices and profits. This involves agreements between producers to set a minimum or maximum price for their products, which can lead to artificially high prices that do not reflect true market demand. In extreme cases, price-fixing can result in cartel behavior, in which producers coordinate their actions to control the market and exclude competition.

Output restrictions are another form of agreement used by oligopolistic producers. This involves limiting the amount of goods or services produced in order to keep prices high and prevent excess supply from driving down prices. While this may benefit producers in the short term, it can also lead to product shortages and higher prices for consumers, as well as reduced economic growth overall.

Market sharing agreements are a third tactic used by oligopolistic producers. This involves dividing up the market among producers in order to reduce competition and maintain market power. For example, two producers may agree to split the market geographically or by product type, with each producer agreeing not to compete in the other`s designated area. While this may benefit the producers involved, it can also restrict consumer choices and lead to higher prices.

In addition to these agreements, oligopolistic producers may also engage in other anti-competitive behaviors, such as exclusive dealing, tying, and predatory pricing. Exclusive dealing involves agreements with suppliers or distributors to only sell a producer`s products, while tying involves forcing consumers to purchase one product in order to obtain another. Predatory pricing involves temporarily lowering prices to drive competitors out of business, after which prices are raised to recoup losses and maintain market power.

Overall, agreements to restrict competition in oligopoly markets can have significant negative effects on consumers and the economy as a whole. While regulation and antitrust enforcement can help to prevent such agreements, consumers and businesses also play an important role in promoting competition by choosing products from diverse suppliers and supporting innovative new entrants in the market.