What would oligopolists do regarding their cooperation in the market
A)The oligopolists are best off cooperating and behaving like a monopolist.
B)Collusive agreements will always prevail.
C)Collective profits are always lower with cartel arrangements than they are without cartel arrangements.
D)Pursuit of self-interest by profit-maximizing firms always maximizes collective profits in the market.

Question

Quizplus · Accepted Answer

Oligopolists are able to exercise market power similar to a monopolist when they cooperate with each other by fixing prices or output levels. This is because there are only a few firms in the market, and they can coordinate their actions to act as a single entity. This behavior is known as collusion, and it can lead to higher profits for each member of the oligopoly. Therefore, the best choice is A.

What Would Oligopolists Do Regarding Their Cooperation in the Market