Asked by jamie sherwood on May 16, 2024
Verified
If all of the firms in an oligopoly successfully collude and form a cartel, then total profit for the cartel is equal to what it would be if the market were a monopoly.
Monopoly
A firm that is the sole seller of a product without any close substitutes.
Collude
To engage in a secret agreement or cooperation, especially with the intention of cheating or deceiving others.
Cartel
An association of independent businesses or countries that work together to control production, pricing, and marketing of goods to monopolize a market.
- Comprehend the role and outcomes of collusion in oligopoly markets compared to monopoly.
Verified Answer
BC
Bella CalomardeMay 20, 2024
Final Answer :
True
Explanation :
In an oligopoly, if all firms collude to form a cartel, they effectively act as a single monopoly by restricting output and raising prices to maximize total profits, similar to how a monopolist operates.
Learning Objectives
- Comprehend the role and outcomes of collusion in oligopoly markets compared to monopoly.
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