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- Oligopolyeconomics-mcqs › oligopoly
- Published
- 30 May 2019
- Last updated
- 28 May 2026
Why is it challenging for firms in an oligopoly to sustain collusion?
Multiple choice question for Oligopoly. Select an option, then review the explanation below.
Explanation
Collusion in an oligopoly is hard to maintain for several reasons: the entry of new firms disrupts agreements, antitrust laws forbid collusion, and the inherent conflict between self-interest and cooperation among firms. Therefore, all these factors contribute to the difficulty.
More Oligopoly MCQs
Practice related questions from the same subject.
- 1.Which concept in game theory is commonly used to analyze oligopoly behavior?
- 2.ABC Publishing offers an economics textbook along with a study guide. Raheel values the textbook at Rs 75 and the study guide at Rs 15, while Mariam values the textbook at Rs 60 and the study guide at Rs 25. Assuming the marginal cost of producing both items is zero, what combined price should ABC Publishing set when pricing the textbook and study guide separately to maximize revenue?
- 3.What do many economists believe is the valid reason behind resale price maintenance?
- 4.What happens to the market price as the number of sellers in an oligopoly grows?
- 5.When an oligopolist independently determines its production quantity to maximize profits, how does its output compare to that of a monopoly and a perfectly competitive market?