question archive In an oligopoly with a collusive agreement, the total industry profits will be smallest when A
In an oligopoly with a collusive agreement, the total industry profits will be smallest when A
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In an oligopoly with a collusive agreement, the total industry profits will be smallest when
A. the firms act as a monopoly.
B. all firms comply with the agreement.
C. all firms cheat on the agreement.
D. one firm cheats on the agreement and the other firms do not cheat
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In an oligopoly with a collusive agreement, the total industry profits will be smallest when C. all firms cheat on the agreement.
When all the firms in the agreement tend to become selfish and start cheating, this would result in unhealthy competitive actions like a price war. This in turn will lead to inefficiency in operation and wastage of resources and lower profits for the industry as a whole.
