34. Which of the following statements is correct? a. If oligopolists successfully collude, then their combined output will be equal to the output that would be observed if the market were a monopoly. b. Although the logic of self-interest decreases a oligpoly's price below the monopoly price, it does not push the duopolists to reach the competitive price. c. Although the logic of self-interest increases a oligopoly's level of output above the monopoly level, it does not push the oligopolists to reach the competitive level. d. All of the above are correct.

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28 December, 18:13

34. Which of the following statements is correct? a. If oligopolists successfully collude, then their combined output will be equal to the output that would be observed if the market were a monopoly. b. Although the logic of self-interest decreases a oligpoly's price below the monopoly price, it does not push the duopolists to reach the competitive price. c. Although the logic of self-interest increases a oligopoly's level of output above the monopoly level, it does not push the oligopolists to reach the competitive level. d. All of the above are correct.

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Mccullough · Answer 1

The correct answer is option d.

Explanation:

If oligopolists are able to collude successfully, they will be able to fix price and output similar to a monopoly.

In order to maximize profits, the oligopoly firms keep their prices higher than a perfectly competitive firm but lower than monopoly. The output level is kept higher than a monopoly firm but lower than a perfectly competitive firm.