In the highly competitive setting in which oligopoly firms operate, which of the following are considered to be typical temptations each may face?
A) to cooperate to generate and then divide up monopoly-like profits
B) to cooperate to mutually decide what price to charge
C) to cooperate to make decisions about what quantity to produce
D) to cooperate to act as a single monopoly and all of the above

Question

Quizplus · Accepted Answer

All of the options listed are typical temptations that firms in an oligopoly might face. They may be tempted to cooperate in various ways to act as a single monopoly, which includes generating and dividing monopoly-like profits, mutually deciding on prices, and making decisions about production quantities. This cooperation can lead to higher profits for the firms involved but can be detrimental to consumers and market competition.

In the Highly Competitive Setting in Which Oligopoly Firms Operate