Question

Distinguish between cooperative and non-cooperative oligopoly

Answer 1

Cooperative or collusive oligopoly is a form of market in which few firms form a mutual agreement to avoid competition. They form a cartel and fix the output quotas and the market price. The leading firm in the market is accepted by the cartel as a price leader. All the firms in the cartel accept the price as fixed by the price leader.

Non-cooperative or non-collusive oligopoly is a form of market in which few firms in the industry. Each firm has its price, and output policy is independent of the rival firms in the market. The firm increases its market share through competition in the mark