Question

In markets characterized by oligopoly,
a. collective profits are always lower with cartel arrangements than they are without cartel arrangements.
b. the oligopolists earn the highest profit when they cooperate and behave like a monopolist.
c. collusive agreements will always prevail.
d. pursuit of self-interest by profit-maximizing firms always maximizes collective profits in the market.

Answer 1

Answer:

In markets characterized by oligopoly, B) the oligopolists earn the highest profit when they cooperate and behave like a monopolist.

Explanation:

Oligopoly markets are those markets in which there are two or more businesses that have no direct competition with each other in the marketplace. Only these few businesses dominate the whole market. Businesses or their owners in these types of markets are known as oligopolists. To get high profits in Oligopoly influenced markets, the oligopolists act like monopolists, which means that they cooperate and become the leaders in their specialties to gain more profits in the market collectively.

Therefore, alternative B is correct.