-(Exhibit: Monopoly Through Collusion) for This Question Assume That the Duopoly

question 36

Multiple Choice

-(Exhibit: Monopoly Through Collusion) For this question assume that the duopoly industry illustrated in the exhibit produces a perishable good. If each firm acted on the belief that it faced demand curve D₂ and acted without consideration of the other firm's behavior, the market price would likely end up being _______ and the combined economic profits of the firms would be _______ .

• A) P₁; given by the area of the rectangle bounded by 0P₁CQ₄
• B) P₁; zero
• C) P₃; given by the area of the rectangle bounded by 0P₃AQ₁
• D) P₂; given by the area of the rectangle bounded by P₁P₂BG

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