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Difference between Collusive and non-collusive oligopoly

Difference between collusive and non-collusive oligopoly. Elucidate how oligopoly firms are interdependent in taking price and output decisions.

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Collusive oligopoly is the one in which, firms cooperate with one other in deciding price and output while, non-collusive oligopoly is one in which firms compete with one other.

The firms are interdependent since each and every firm takes into consideration the likely reactions of its rival firms whenever deciding its output and price policy.

It builds a firm dependent on other firms. The firm might have to re-consider the modification in the light of likely reactions.

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