One Inherent Factor That Tends to Destroy Collusion Among Oligopolists

question 86

Multiple Choice

One inherent factor that tends to destroy collusion among oligopolists is the

• A)incentive to cheat.
• B)product differentiation.
• C)mutual interdependence.
• D)leadership of the dominant firm.

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Definitions:

Support Price

A price level set by the government or a regulatory body to stabilize or support the market price of a commodity.

Demand Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with all else being equal.

Producer Surplus

The difference between what producers are willing to sell a good for and the higher price they actually receive.

Government Policy

Actions, regulations, or laws enacted by a government to influence economic, social, or environmental outcomes within its jurisdiction.