Question

___ have a greater incentive to collude with other firm in the industry and to form cartels in an effort to achieve monopoly-like profits.

A. Oligopolists

B. Monopolists

C. Firms in a perfectly competitive market

D. Monopolistic competitors

Answer 1

An oligopoly market structure can be defined as the market structure with a small number of firms and none of firm can keep the others from having significant influence. In this few big firms control most of the market share.

Since there are few large firms, so it is beneficial for the existing large firms to collude and control price and quantity, so that the profit of the cartel firms could be maximised.

Hence it can be said that an Oligopolists have a greater incentive to collude with other firm in the industry and to form cartels in an effort to achieve monopoly-like profits.

Hence option A is the correct answer.

Option A; Oligopolists.