Answer to Question #233610 in Microeconomics for MD. ISRAKH AHMMED

Question

Identify factors that encourage firms to collude indirectly in an oligopoly market. Build a case study in the context of Bangladesh.

Answer 1

Within the oligopoly market, every company may want to indirectly collude for the purposes of realizing high economic profit as well as raising the prices. Every firm is targeted at maximizing profits, therefore due to customer preference, it is important for the market price to be raised uniformly. Most of oligopoly firms exist in markets when goods' are undifferentiated relatively as they avail similarly benefits to customers broadly.