When firms in an oligopoly successfully collude and do not cheat on a cartel agreement,they can make a long-run economic profit similar to
A) perfect competition.
B) monopoly.
C) monopolistic competition.
D) non-colluding oligopolies.
E) the firms in regulated industries.

Question

Quizplus · Accepted Answer

Successful collusion among firms in an oligopoly leads to a situation similar to a monopoly, where the firms can restrict output, charge higher prices, and earn long-run economic profits due to the barriers to entry. This is not possible in perfect competition, monopolistic competition, non-colluding oligopolies, or regulated industries.

When Firms in an Oligopoly Successfully Collude and Do Not