Which of the following,if true,would allow oligopolists to enjoy greater profits through collusion?
A)The collusion contract is non-binding.
B)The game is being played only once.
C)The players are not allowed to interact among themselves.
D)The collusion contract is enforced by an external authority.

Question

Quizplus · Accepted Answer

If the collusion contract is enforced by an external authority, such as a government agency or regulatory body, the oligopolists are more likely to abide by their agreement and not cheat on each other. This creates a more stable industry environment and allows for higher prices and profits for the oligopolists. Additionally, the threat of punishment or legal action for violating the collusion agreement serves as a deterrent for any temptation to cheat.

Which of the Following,if True,would Allow Oligopolists to Enjoy Greater