Use the Following to Answer Question

question 193

Multiple Choice

Use the following to answer question:
Figure: Monopoly Profits in Duopoly
-(Figure: Monopoly Profits in Duopoly) Use Figure: Monopoly Profits in Duopoly.If the two firms in the figure colluded to split production evenly and to maximize their joint profits,the market price they set would be _____,and each firm's economic profit would be _____.(Assume that the market demand curve is D₂. )

• A)P₂;given by the area of the rectangle bounded by P₁P₂EF = FEBG
• B)P₁;P₁P₃AF
• C)P₃;given by the area of the rectangle bounded by 0P₃AQ₁
• D)P₂;given by the area of the rectangle bounded by P₁P₂BG

---

Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers at those prices.

Price Makers

Entities that have the ability to control the prices of the products or services they offer, due to lack of significant competition.

Downward-Sloping Demand

Describes the general tendency for the demand for a good or service to decrease as its price increases.

Monopolistic Competitors

Firms in a market structure where many companies sell products or services that are similar but not identical, allowing for competition based on quality, price, and branding.