Use the Following to Answer Question

question 79

Multiple Choice

Use the following to answer question:
Figure: Monopoly Profits in Duopoly
-(Figure: Monopoly Profits in Duopoly) Use Figure: Monopoly Profits in Duopoly.The figure shows how an industry consisting of two firms that face identical demand curves (D₁) can collude to increase profits.The market demand curve is D_2. Which assumption is part of the analysis illustrated by the model?

• A)The two firms have identical marginal cost but different average total cost.
• B)The two firms sell differentiated products.
• C)The MR curve is not relevant to either firm's choices.
• D)The firms can act as a cartel and maximize their combined economic profit.

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Definitions:

Young Boys

Young boys refers to male children or adolescents, typically in the early stages of development prior to reaching puberty.

Sharp Trading

Aggressive or deceitful trading practices that lie on the fringes of legality, often associated with unethical behavior in financial markets.

Balanced Reciprocity

A form of exchange where goods or services of roughly equal value are traded within a specified time frame, often among people with a social relationship.

Barter

is a method of exchange where goods or services are traded directly for other goods or services without the use of money.