If an oligopolist is part of a cartel that is collectively producing the monopoly level of output, then that oligopolist has the incentive to increase production with the aim of A. increasing prices. B. increasing profits for the group of firms as a whole. C. increasing profits for itself, regardless of the impact on profits for the group of firms as a whole. D. decreasing costs of production.

Question

Paola Crawford

Business

27 November, 22:17

If an oligopolist is part of a cartel that is collectively producing the monopoly level of output, then that oligopolist has the incentive to increase production with the aim of A. increasing prices. B. increasing profits for the group of firms as a whole. C. increasing profits for itself, regardless of the impact on profits for the group of firms as a whole. D. decreasing costs of production.

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Medina · Answer 1

B Increasing profits for itself, regardless of the impact on profits for the group of firms as a whole

Explanation:

This is due to the fact that oligopolist cares only about its own profit and this showcase a dominant strategy because monopolistically he has some control over product price.