Question

If oligopoly firms decide to work together, either formally or informally, and honor the agreement then profits can be ________ by ________ output and ________ the price of goods and services. maximized; increasing; increasing minimized; reducing; increasing maximized; reducing; increasing

Answer 1

The correct answer is: maximized; reducing; increasing.

Step-by-step explanation:

An oligopoly market is a market structure in which there is a small number of firms. The business decisions of each firm affect its competitors. There is no restriction on entry and exit of firms. There is a high degree of competition between firms.

The firms can maximize their profits if they collude and act like a monopoly. They can earn monopoly profits by reducing the level of output and increasing the price of products.