In markets characterized by oligopoly,A) the oligopolists earn the highest profit when they cooperate and behave like a monopolist.B) collusive agreements will always prevail.C) collective profits are always lower with cartel arrangements than they are without cartel arrangements.D) pursuit of self-interest by profit-maximizing firms always maximizes collective profits in the market.

Question

In markets characterized by oligopoly,A)  the oligopolists earn the highest profit when they cooperate and behave like a monopolist.B)  collusive agreements will always prevail.C)  collective profits are always lower with cartel arrangements than they are without cartel arrangements.D)  pursuit of self-interest by profit-maximizing firms always maximizes collective profits in the market.

Victorina Navarro · Accepted Answer

Final Answer : A, Explanation :  Oligopolists earn the highest profit when they cooperate and behave like a monopolist because they can restrict output and raise prices, similar to a monopoly. However, such collusion is often illegal and difficult to maintain.

Definitions

Learning Objectives

Learning Objectives

Related questions