Statement I.Collusion is most likely to succeed when there are many firms in the industry.
Statement II.Firms in an industry that divide a market by territory make price and output decisions similar to the way a monopolist would operate.

Question

Quizplus · Accepted Answer

Statement I is false because collusion is easier to maintain when there are fewer firms in the industry. With more firms, it becomes harder to enforce and monitor collusion agreements. 
Statement II is true because territorial division allows firms to act as monopolies in their respective regions and make pricing and output decisions as if they were a single dominant firm.