Some observers assert that oligopolies are less socially desirable than pure monopolies because
A) monopolies are often government-regulated, whereas collusion among oligopolies may lead to similar results as a monopoly yet, having several firms, may give the illusion of competition.
B) monopolies have unique products, whereas product differentiation in oligopolies would lead to economic inefficiencies.
C) mutual interdependence among firms in an oligopoly would lead to more inefficiencies than in the case of a monopoly.
D) oligopolies tend to engage in advertising more so than monopolies.

Question

Quizplus · Accepted Answer

Government regulation can help prevent the negative effects of a monopoly, whereas collusion among oligopolies can lead to similar market outcomes without regulation. Additionally, the presence of multiple firms in an oligopoly can give the illusion of competition, while in reality, they may be colluding to maintain high prices and limit output, leading to economic inefficiencies.

Some Observers Assert That Oligopolies Are Less Socially Desirable Than