Collusion

Question 1

What are conditions necessary for oligopolists to collude?

Answer 1

• Sellers must be aware of each others strategies

- Sellers must interact repeatedly

Question 2

How do you calculate the present value of an investment over time using interest rate?

Answer 2

1/(1+r) when r is interest rate

Question 3

What is the likely outcome if firms interact repeatedly, observe each others actions and are relatively similar?

Answer 3

They may behave in a manner similar to a monopolist