Question
Distinguish 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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Under this form, firms might decide to collude together and not to compete with each other.
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In this form of oligopoly, firms do not collude, but compete with each other.
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2.
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Firms behave
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Under this oligopoly, the firms would behave as a single monopoly.
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Under this oligopoly, the firms behave independently.
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3.
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Aim
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They aim at maximising their collective profit rather than their individual profit.
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The firms aim to maximising its own profits and decides how much quantity to be produced assuming that the other firms would not change their quantity supplied.
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