Collusive oligopoly is beneficial to
Answers
Answer:
Collusion in an oligopoly can hugely benefit firms, which can have beneficial consequences for society.
Collusive Oligopoly is beneficial to companies within the same industry to increase their mutual profits instead of competing against each other.
Eg: OPEC
Explanation:
Oligopoly is a situation of restricted competition in which a small number of manufacturers or sellers share a market.
In order to maximise industry profits, firms in an oligopoly may collude to fix a price or output level for a market. The collaborating corporations can behave as a monopoly in severe cases.
Oligopolists would produce more than a monopolist and charge a lesser price if they pursued their own self-interest.
Collusive agreements are typically prohibited. Furthermore, corporations find it difficult to coordinate their operations, and there is a risk that some may defect and damage the rest of the arrangement.