Advertising in oligopoly market

Reference no: EM1315415

In 1971, congress passed a law banning cigarette advertisements on television. When the law went into effect, cigarette advertising fell, and the profits of cigarette companies rose. Using the theory of oligopoly and the concept of prisoners dilemma, explain why the cigarette companies did not cut on advertising on their own to increase their profits before the law went into effect?

Reference no: EM1315415

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