Question 1 The behavior of oligopolistic firms is interdependent. One way of demonstrating how oligopolistic firms...

Question 1

The behavior of oligopolistic firms is interdependent. One way of demonstrating how oligopolistic firms may behave is chaos theory /game theory, which shows that most cartel agreements maybe __________________________ as firms have incentive to _____________________________.

Question 2

The intent of anti-trust legislation is to promote _______________________________ and prevent formation of ___________________________________. Some examples of anti-trust laws are _________________________________________________.

Expert Solution

(Question 1)

Most cartel agreements maybe unstable as firms have incentive to cheat.

(Question 2)

The intent of anti-trust legislation is to promote competition and prevent formation of monopoly (or market power). Some examples of anti-trust laws are Sherman Act (1890), Clayton Act (1914) and US Department of Justice FTC Act (1914).

Rahul Sunny answered 2 years ago

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