Problem
1. Do firms in oligopolistic industries have an incentive to collude? What factors will reduce the likelihood of successful collusion (from the viewpoint of the firms)? Will the threat of potential new rivals in an oligopolistic industry influence the price and output policies of the existing firms in the industry? Explain.
2. Will oligopolistic firms be able to charge prices that are higher than average cost? What factors may limit their ability to do so? Will firms in an oligopolistic industry make high profits? Why or why not?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.