Two Firms,Alpha and Beta,produce Identical Computer Hard Drives

question 36

Multiple Choice

Two firms,Alpha and Beta,produce identical computer hard drives.They have identical costs,and the hard drives they produce are identical.The industry is a natural duopoly.Alpha and Beta enter into a collusive agreement,according to which they split the market equally.If both firms cheat on the agreement so the market is the same as a competitive market,

• A)each firm makes zero economic profit in the long run.
• B)each firm makes the monopoly profit.
• C)the oligopoly will produce fewer hard drives than a profit-maximizing monopoly would produce.
• D)the oligopoly will produce the same number of hard drives as a profit-maximizing monopoly would produce.
• E)each firm incurs an economic loss and exits the market in the long run.

---

Definitions:

Critical Industrial Relations

Analysis of employment relationships, focusing on power dynamics, conflict, and the regulatory framework.

Capitalistic System

An economic system where private individuals rather than the state own and operate the means of production and distribution of goods and services, driven by profit.

Pluralist View

The perspective that power in societies is distributed among various groups and interests, and that no single group dominates others consistently.

Workplace Conflict

Disagreements, disputes, or tensions among workers or between employees and management in a workplace, which can arise from issues related to job duties, working conditions, or interpersonal relationships.