question archive A cartel is branch of an oligopoly
A cartel is branch of an oligopoly
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A cartel is branch of an oligopoly. There are still a handful of large firms and many smaller firms. For instance, the diamond industry and the petroleum industries are examples are oligopolies. However, the main difference is that there is cooperation among the firms. Cooperation with output, price, marketing, distribution and future planning.
Within a capitalist economy, an oligopoly would not maximize efficiency for both the consumer or the producer.
Does this make the completion much more or much less fierce? Explain.
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When consumers and producers can't participate effectively in an oligopoly where capitalism is profound, the accomplishment made by the cooperation among the firms is usually fiercer. The whole point of the collaboration of oligopolistic firms is ensuring that every firm in the market structure obtains profits beyond normal. Therefore, in a capitalist economy, there will be a stronger drive for all the firms to profit; after all, the significant element of capitalism is creating profits. Oligopolistic firms will cooperate more to ensure that the amount of profits generated in the economy is more.
