CFA Practice Question

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CFA Practice Question

From the perspective of all the firms in an industry, the ideal collusive agreement is identical to (the) ______.
A. competitive equilibrium
B. monopoly equilibrium
C. monopolistic competition
Explanation: The ideal collusive equilibrium is equivalent to the monopoly equilibrium.

User Contributed Comments 5

User Comment
CHADZAMIRA What exactly does this answer mean? Can collusion take place in a single-firm industry? Please explain this to me!
faya it should be oligopolistic equilibrium in my opinion
Janey In a collusive agreement oligopolistic firms wish to have a monopoly equilibrium
cp24 The net effect of collusion among all firms in an industry is equal to having just one firm in that industry (i.e. a monopoly).
steved333 yes. when firms collude, they act as a single firm...
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