In an oligopoly market,collusion between firms usually leads to higher profits than does noncooperative behavior.However,formal,overt collusion doesn't usually occur in the United States because: I.it is illegal.
II.there is an incentive for each firm to cheat on a collusive agreement.
III.an oligopolistic firm will typically prefer lower profits for itself if the only way to make higher collective profits in the industry is to improve the profit position of its rivals.

Question

Quizplus · Accepted Answer

Formal, overt collusion is illegal under antitrust laws in the United States, which discourages firms from engaging in such practices. Additionally, even if firms attempt to collude, there is a strong incentive for individual firms to cheat on the agreement to gain a larger market share or profit, making such agreements unstable.

In an Oligopoly Market,collusion Between Firms Usually Leads to Higher