Cartelsareillegalbutsomedooperateinsome industries

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Unformatted text preview: (just like a monopoly). – The firms then split the monopoly level of profits among all the firms in the industry. When firms in an oligopoly co­operate, they collude. – When firms collude, they form a cartel. – A cartel is a group of firms acting together to limit output, raise price and increase economic profit. – Cartel’s are illegal, but some do operate in some industries. – Cartel’s tend to break down: we saw this in our exercise.6 Actions for Firms: Co­operate Actions for Firms: Co­operate So in summary: – Firms who co­operate lead to monopolist level prices and quantities in total. – When looking at Oligopolies at a whole, this is the Pare...
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This document was uploaded on 03/23/2014.

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