Question 1 Question 1A: Name and describe the phenomenon which involves such joint decisionmaking. What are its advantages and disadvantages ? Joint decision-making such a group is termed as a collusion. Advantages of such decisionmaking could he the following: a Competitive oligopoly could result in price wars and increased consumer surplus e.g. one of the biggest advantage of OPEC is the control of oil prices which has an immense impact on all economies fproducts at a global level. 0 Dominant players can achieve economies of scale resulting in lower product prices in the long run. 0 Steady supply - another advantage could be steady supply of oil depending on the market scenario e. g. when the WTI crude oil prices went into negative, people who had purchased futures were forced to take delivery but they did not have the bandwidth to store such high volume of oil. a Lead to more investment in research and development. Disadvantages of such decision-making could be the following: 0 Reduction in consumer choices because the demand and supply is determined by the collusion as against normal market forces. a Cartellike behavior reduces competition and can lead to higher prices. o Deliberate barriers to entry could be created. 0 There is a potential loss of economic welfare