Asked by Julianne Marie on Jul 13, 2024
Verified
If the government stops enforcing its collusion laws and oligopolies are now able to collude, they will ________ the price charged and ________ the total output produced.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Collusion Laws
refer to regulations aimed at preventing firms or individuals from working together to manipulate prices, limit competition, or engage in other practices deemed unfair or anti-competitive.
Oligopolies
Market structures characterized by a small number of firms dominating the industry, often leading to limited competition and higher prices.
- Understand the mechanisms and results of a colluding oligopoly in the market.
- Assess the consequences of governmental interference on cartel behaviors and price manipulation.
Verified Answer
RG
Richard GannonJul 19, 2024
Final Answer :
B
Explanation :
When oligopolies are able to collude, they tend to act like a monopoly, setting higher prices and reducing total output to maximize their combined profits.
Learning Objectives
- Understand the mechanisms and results of a colluding oligopoly in the market.
- Assess the consequences of governmental interference on cartel behaviors and price manipulation.