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3.4.4 Oligopoly

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Question 16

In July 2021, three major automotive parts manufacturers were fined €368 million (£315 million) by the European Commission for participating in a cartel to coordinate pricing over a nine-year period. The companies had agreed to collude to offset rising input costs for raw metals and components.

With reference to an industry of your choice, evaluate the reasons why firms in oligopolistic markets engage in collusive behaviour.

Oligopoly joint profit-maximisation diagram

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3.4.4 Oligopoly Questions

  1. A Level
  2. /Economics
  3. /3.4.4 Oligopoly