Asked by Hilary Sahagun on May 25, 2024
Verified
The higher the degree of oligopolization
A) the greater the likelihood of collusion.
B) the smaller the likelihood of collusion.
C) the greater the likelihood of product differentiation.
D) the greater the likelihood of cut-throat competition.
Degree Of Oligopolization
The extent to which a market or industry is dominated by a few large companies, limiting competition.
Collusion
An agreement between competing firms to control prices or exclude entry of a new competitor in the market, often in secret, to reduce competition and increase profitability.
- Examine the effects of oligopoly dynamics on competitive market behaviors and the probability of collaborative schemes.
Verified Answer
AV
Angel ValenzuelaMay 31, 2024
Final Answer :
A
Explanation :
The higher the degree of oligopolization, the greater the likelihood of collusion. This is because in a highly concentrated market with only a few dominant firms, each firm has a significant impact on the market and can potentially benefit from colluding with other firms to maximize profits.
Learning Objectives
- Examine the effects of oligopoly dynamics on competitive market behaviors and the probability of collaborative schemes.