CA Foundation P4 · Chapter 4 · Question 14 of 15
A formal agreement among oligopolistic firms to fix prices or share output, in order to act like a monopoly, is called:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A cartel
Explanation
A cartel is an explicit collusive arrangement in which members jointly set price and output (often by quotas) to maximise joint profits. Price leadership is a form of tacit collusion where one firm sets the price and others follow, without a formal agreement.
More Price Determination in Different Markets MCQs
- Q1The demand curve facing an individual firm under perfect competition is:
- Q2A monopolist faces the demand curve P = 50 - 2Q. At Q = 10, total revenue and marginal revenue respectively are:
- Q3If average revenue is Rs. 60 and price elasticity of demand is 3, marginal revenue is:
- Q4Market demand is Qd = 200 - 5P and market supply is Qs = 50 + 10P. The equilibrium price and quantity are:
- Q5In the short run, a perfectly competitive firm will shut down if the market price falls below: