Collusion is difficult for an oligopoly to maintain ?
Correct answer: A. all of these answers
- A. all of these answers
- B. if additional firms enter of the oligopoly
- C. because antitrust laws (also known as competition laws) make collusion illegal
- D. because, in the case of oligopoly self-interest is in conflict with cooperation.
Explanation
Collusion is undermined by new entry, legal bans under antitrust laws, and each firm's incentive to secretly increase output or cut price. Thus all three listed factors make a cartel difficult to maintain.
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