Which of the following is a consequence of oligopolist hotdog vendors on the beach failing to cooperate with one another on the quantity of hotdogs they should sell?
(i) the quantity supplied to the market will be closer to the socially optimal level
(ii) the invisible hand of the market will help to allocate resources more efficiently
(iii) markets will become less competitive
A)(i) and (ii)
B)(ii) and (iii)
C)(i) and (iii)
D)(iii) only

Question

Quizplus · Accepted Answer

When oligopolists fail to cooperate, they tend to compete more with each other, which can lead to an increase in quantity supplied, moving the market closer to the socially optimal level of output. This competition can also lead to a more efficient allocation of resources, as described by the concept of the invisible hand, where individual self-interests promote the good of the community.

Which of the Following Is a Consequence of Oligopolist Hotdog