If the firms in an oligopolistic industry can establish an effective cartel, the resulting output and price will approximate those of

Question

Quizplus · Accepted Answer

If the firms in an oligopolistic industry establish an effective cartel, the resulting output and price will approximate those of a pure monopoly. A cartel is a group of producers who form a collusive agreement to control production and prices in a market, similar to a monopoly. Therefore, the resulting output and price will be closer to those of a pure monopoly than a purely competitive producer or a monopolistically competitive producer. A low four-firm concentration ratio indicates a more competitive market structure, so D is also not a correct choice.

If the Firms in an Oligopolistic Industry Can Establish an Effective