Question

In oligopoly firms can engage in a cartel that will lead to a/an:

Multiple Choice

• collusive agreement.

• collusive disagreement.

• collusive disunity.

• collusive non-concurrence.

Answer 1

An oligopoly is a market structure in which there are few large firms of some goods and services which control the almost most part of the market. So there is an incentive for the firms instead of competing with each other, there should be collusion of the firms and they forms the cartel. Hence by making cartel, they control prices by controlling the quantity of goods. These firms makes cartel by a collusive agreements.

Hence it can be said that In oligopoly firms can engage in a cartel that will lead to a collusive agreements.

Hence option first is the correct answer.

Option first; a collusive agreements.