ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -For the oligopolist, the firms colluding achieve higher profits, stabilize prices, reduce market uncertainty, and avoid direct competition.

Detailed explanation-2: -Collusive oligopoly is a form of the market, in which there are few firms in the market and all of them decide to avoid competition through a formal agreement. They collude to form a cartel, and fix for themselves an output quota and a market price.

Detailed explanation-3: -The collusive model of price leadership is common in oligopolistic markets. Collusive price leadership happens when several dominant companies agree to maintain their prices in a parallel alignment. Smaller competing businesses are compelled to follow the price change set by the dominant players.

Detailed explanation-4: -Collusive oligopoly is a market situation wherein the firms cooperate with each other in determining price or output or both. A non-collusive oligopoly refers to a market situation where the firms compete with each other rather than cooperating.