Which of the following statements is true? With regards to social welfare, oligo

Question

Which of the following statements is true?

With regards to social welfare, oligopolists forming a cooperative alliance is :

You are assigned a two-student project. Assume that you and your partner are both interested in maximizing your grade, but you are both very busy and get more happiness if you can get a good grade with less work.

If you and your partner are required to work together on a number of projects throughout the semester, what other possible equilibrium might you be able to sustain?

Explanation / Answer

First question is answered below.

1.

Correct option: (c) prices are higher when an oligopoly market is compared to competitive markets

Reason: Oligopoly markets operate for profit maximization, setting price higher than MC. In case of competitive markets, P = MC. This makes oligopoly price higher than competitive price.

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