Question

Explain the role of cooperation that may find its way into an oligopoly. Using economic theory,...

Explain the role of cooperation that may find its way into an oligopoly. Using economic theory, when does “cooperation” go “over the line” and become “collusion?” Cite some real world examples of cooperation that have devolved to collusion.

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Answer #1

The role of cooperation which may find its way into an oligopoly in the area of changing price,in the area of changing technology,etc.

cooperation in oligopoly market may result beneficiary for all the firms in oligopoly market.

Cooperation go over the line and become collusion when there prevails cut-throat competition in the oligopoly market.

For example- in 1936, there was a cut-throat competition between various cement in oligopoly market and then to reduce such competition they cooperated to merged the various companies namely called ACC (Associate cement companies limited).

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