Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 17 - Part V - Oligopoly - Questions for Review: 5

Answer

It's a scenario that illustrates why it is difficult to cooperate even though it may be more beneficial. It describes the scenario that oligopolists face.

Work Step by Step

Even though oligopolists know that they will profit more if they cooperate and produce what a monopolist would in their position, it is still extremely difficult for them to work together, because cooperation is irrational for each of the firms individually.
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