Question
Distinguish between cooperative and non-cooperative oligopoly.###Differentiate between collusive and non-collusive oligopoly.
S. No | Basis | Collusive Oligopoly | Non-Collusive Oligopoly |
1. | Meaning | When in an oligopoly market, the firms cooperate with each other in determining prices and output both. | When in Oligopoly market, the firm's compete with each other. |
2. | Profit | 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. | 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. |
3. | Aim | All firms collude to form a cartel and fix output and price by themselves through output quotas and market price. | Each firm tries to increase its market share through competition. |
4. | Alternative Name | Cooperative Oligopoly. | Non-Cooperative Oligopoly. |
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| Output(Units) | Price(Rs.) | Total Revenue(Rs.) | Marginal Revenue(Rs.) |
| 4 | 9 | 36 | - |
| 5 | - | - | 4 |
| 6 | - | 42 | - |
| 7 | 6 | - | - |
| 8 | - | 40 | - |
| (Rs. in crores) | ||
| 1 | Income from property and entrepreneurship was accruing to government administrative deparments. | 500 |
| 2 | Saving of non-departmental public enterprises. | 100 |
| 3 | Corporation tax. | 80 |
| 4 | Income from domestic product accruing to private sector. | 4,500 |
| 5 | Current transfers from government administrative deparments. | 200 |
| 6 | Net factor income from abroad. | (-)50 |
| 7 | Direct personal taxes. | 150 |
| 8 | Indirect tax. | 220 |
| 9 | Current transfers from rest of the world. | 80 |
| 10 | Saving of private corporate sector. | 500 |