When the Firms in an Oligopoly Are in a Cooperative

question 16

Multiple Choice

When the firms in an oligopoly are in a cooperative equilibrium and are maximizing their joint profits,which of the following statements is true?

• A)The firms in the industry will jointly be earning monopoly profits.
• B)An individual firm could increase profits by cheating.
• C)P > MC for each individual firm.
• D)MR > MC for each individual firm.
• E)All of the above statements are true.

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Definitions:

Compress

To press together or into less space.

Prime Mover

Muscle that plays a major role in accomplishing a movement.

Cause Movement

The initiation of change in position or motion in response to external or internal stimuli.

Named

Designated or given a specific title.