In an oligopoly where firms currently cooperate to set prices and output for maximizing collective profits, what happens to the price and total quantity produced if this collusion ends?

Show Answers

Price will fall; output will fallPrice will rise; output will fallPrice will fall; output will risePrice will rise; output will risePrice and output remain unchanged

Explanation

When oligopolistic firms cease colluding, competition typically intensifies, causing prices to drop and total production to increase as each firm tries to capture more market share.