Asked by Estefania Carlos on Jul 13, 2024
Verified
Under the collusion model, the outcome in an oligopoly is the same as a monopoly.
Collusion Model
A framework describing how firms may work together, often secretly, to control prices or market conditions, typically to reduce competition and increase profits.
Monopoly
A market structure characterized by a single seller or producer dominating the entire market, with no close substitutes for the product or service offered.
- Determine the circumstances that allow cartels and collusion frameworks to function effectively.
Verified Answer
MS
MaKayla SmallwoodJul 18, 2024
Final Answer :
True
Explanation :
In the collusion model of oligopoly, firms cooperate to act as a single monopolist, setting production levels and prices to maximize joint profits, leading to outcomes similar to those of a monopoly.
Learning Objectives
- Determine the circumstances that allow cartels and collusion frameworks to function effectively.