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

Quizplus · Accepted Answer

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.

In Markets Characterized by Oligopoly