Give the differences between collusive and non-collusive oligopoly.

Asked by Topperlearning User | 26th Apr, 2016, 07:51: AM

Expert Answer:

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. 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-collusive oligopoly is a form of market in which few firms. Each firm has its price and output policy is independent of the rival firms in the market. The entire firms enable to increase its market share through competition in the market.

Answered by  | 26th Apr, 2016, 09:51: AM