In which way would a group of oligopolists generally be better off acting collectively
A)as if they were each seeking to maximize their own individual profits
B)in a manner that would prohibit collusive agreements
C)as a single monopolist
D)as a single perfectly competitive firm

Question

Quizplus · Accepted Answer

A group of oligopolists would generally be better off acting collectively as a single monopolist. By working together, they can limit competition and drive up prices, resulting in higher profits for all the firms involved. This is known as collusive behavior and is illegal in many countries. However, it is still a common practice among oligopolists. If the firms acted as if they were each seeking to maximize their individual profits, they would likely engage in aggressive price competition, leading to lower prices and profits for all. Similarly, prohibiting collusive agreements would also result in increased competition and lower profits for the firms involved. Acting as a single perfectly competitive firm would also be disadvantageous for oligopolists, as they would be forced to compete on price, resulting in lower profits for all.

In Which Way Would a Group of Oligopolists Generally Be