http://www.kenniffonline.com/cigarette-companies-profits/
Economics Question on theory of oligopoly and Prisoners Dilemma?
Hey everyone, Im stuck on a question that I need to complete formy economics homework. Any help would be greatly appreciated.
1. 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 advertising on their own to increase their profits before that law went into effect.
The answer is pretty simple, but I’m not going to do your homework for you. Go get a tutor, and hit up wikipedia.
Cigarette Companies Boast Profits