If Gulfstream and Bombardier,both producers of upscale jet airplanes,were to collude rather than compete,consumers could expect:
A) higher prices and lower quantities offered for sale.
B) lower prices and lower quantities offered for sale.
C) higher prices and higher quantities offered for sale.
D) each firm to cheat on the cartel agreement.
E) one firm to emerge as the price leader in the oligopoly.

Question

Quizplus · Accepted Answer

If Gulfstream and Bombardier collude, they would form a cartel and act as a monopolist in the market for upscale jet airplanes. This would result in higher prices due to the lack of competition and lower quantities offered for sale to maintain the higher prices. Therefore, consumers can expect higher prices and lower quantities offered for sale.

If Gulfstream and Bombardier,both Producers of Upscale Jet Airplanes,were to Collude