If a Duopoly Collusive Agreement Is Made That Maximizes Joint

question 57

Multiple Choice

If a duopoly collusive agreement is made that maximizes joint profit,

• A)each of the duopolists has no incentive to cheat on the agreement.
• B)each duopolist has the incentive to cheat on the duopoly agreement by lowering the price.
• C)each duopolist has the incentive to cheat on the agreement by increasing the price to make monopoly profit.
• D)there is no concern over the entrance of potential rivals, since they cannot decrease the duopolists' profit.
• E)the dominant strategy is to collude.

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Definitions:

Range of Reaction

A theory suggesting that genetic potential sets certain limits on the expression of traits, but the environment determines where within those limits an individual will fall.

Epigenesis

The process through which the genotype interacts with the environment to guide development, affecting gene expression without altering the DNA sequence.

Passive Correlation

A statistical relationship between two variables where changes in one variable occur alongside but are not directly caused by changes in the other.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, influencing thoughts, feelings, and behaviors.