Question
Distinguish between cooperative and non-cooperative oligopoly.
OR
Differentiate between collusive and non-collusive oligopoly.
OR
Differentiate between collusive and non-collusive oligopoly.
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S. No
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Basis
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Collusive Oligopoly
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Non-Collusive Oligopoly
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1.
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Meaning
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When in an oligopoly market, the firms cooperate with each other in determining prices and output both.
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When in Oligopoly market, the firm's compete with each other.
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2.
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Profit
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Under Collusive Oligopoly, the firms would behave as a single monopoly (i.e., cartel) and aim at maximising their collective profit rather than their individual profits.
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Under Non-Collusive Oligopoly, each firm aims at maximising its own profits and decides how much quantity to produce assuming that the other firms would not change their quantity supplied.
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3.
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Aim
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All firms collude to form a cartel and fix output and price by themselves through output quotas and market price.
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Each firm tries to increase its market share through competition.
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4.
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Alternative Name
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Cooperative Oligopoly.
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Non-Cooperative Oligopoly.
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Total Output
(Units)
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Total Cost (Rs)
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|
0
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120
|
|
1
|
180
|
|
2
|
200
|
|
3
|
210
|
|
4
|
230
|
|
5
|
270
|
|
6
|
360
|
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Output
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5
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6
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7
|
|
AC
|
40
|
41
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42
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