Answer to Question #100030 in Microeconomics for Md Hammad

Question

All firms under collusive oligopoly model maximise profit but under leadership model only the leader maximizes profit .Discuss the statement with appropriate diagrams

Answer 1

All firms under collusive oligopoly model maximise profit, because the industry is similar to the monopoly, where the monopolist's profit is maximized. But under leadership model only the leader maximizes profit, because he has the opportunity to move first and gain more.

So, the statement is true.