If There Is an Increase in the Number of Firms

question 96

Essay

If there is an increase in the number of firms in an oligopoly, what effect would this have on the market if:
(a) they act independently of each other, and
(b) they collude and enforce a cartel agreement?

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Definitions:

Constant

A value that does not change and remains fixed within a given context or equation.

Y-axis

The vertical axis in a graph or chart, typically representing the dependent variable.

X-axis

The horizontal axis in a two-dimensional graph, typically representing the independent variable.

Positive Relationship

A positive relationship in economics indicates that an increase in one variable is associated with an increase in another variable.