Collusion in Oligopoly Is Difficult to Achieve Because

question 52

Multiple Choice

Collusion in oligopoly is difficult to achieve because:

• A) it is prohibited by law.
• B) every firm has an incentive to cheat given that others follow the agreement.
• C) firms usually take care of consumers' interests as a decision priority.
• D) it is prohibited by law and every firm has an incentive to cheat given that others follow the agreement.

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Definitions:

International Operations

Business activities conducted in more than one country, involving cross-border transactions of goods, services, or capital.

International Fisher Effect

An economic theory stating that the difference in nominal interest rates between two countries is proportional to the expected change in the exchange rate between their currencies.

Expected Changes

Expected changes refer to anticipated modifications in conditions or variables, often used in forecasting scenarios in finance or economics.