Business, 20.04.2020 20:55 devoncruz23

Assume the market for cell phones is an oligopoly. Further assume that cell phone consumption and production generate no negative externalities. Imagine that all the companies in the oligopoly agree to collude and charge a single price for their cell phones.

Which of the following is true?

A. This agreement is in the best interest of society because the price of cell phones will be higher than if there had been no collusive agreement.
B. This agreement is in the best interest of society because the quantity of cell phones sold will be significantly less than the quantity that would be sold if the cell phone market were perfectly competitive
C. This agreement is not in the best interest of society, because there will be less competition and the price of cell phones will be significantly above marginal cost.
D. This agreement is not in the best interest of society, because there will be less competition and the price of cell phones will be significantly below marginal cost.

Answers: 2

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Assume the market for cell phones is an oligopoly. Further assume that cell phone consumption and pr...

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