Define the term understanding oligopoly.

Understanding Oligopoly;

One possibility when the two companies will engage into collusion, Sellers engage into collusion while they cooperate to increase each others’ profits.

The strongest type of collusion is a cartel, an agreement by various producers which increases their combined profits through telling each one how much to generate.

They may also engage within non-cooperative behavior, avoiding the effects of their actions onto each others’ profits.