When oligopolists collude and act like a monopoly, they charge a price above marginal cost.When they act independently, they charge a price equal to marginal cost.

Question

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When oligopolists act independently, they do not necessarily charge a price equal to marginal cost; they often set prices above marginal cost but below the monopoly price, depending on the degree of competition and market dynamics.

When Oligopolists Collude and Act Like a Monopoly, They Charge