____ make(s)it difficult for an oligopoly to maintain a cooperative outcome with low production,high prices,and monopoly profits.

Question

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Self-interest motivates each firm in the oligopoly to try to increase its own profits by producing more and lowering prices, rather than maintaining a cooperative outcome. Incentives to cheat also arise as each firm may be tempted to break the agreements and produce more than their agreed-upon share. Finally, government antitrust policies and regulations are designed to prevent oligopolies from maintaining high prices and monopoly profits, thus making it difficult for them to maintain a cooperative outcome. Therefore, all of the above factors make it difficult for an oligopoly to maintain a cooperative outcome with low production, high prices, and monopoly profits.

____ Make(s)it Difficult for an Oligopoly to Maintain a Cooperative