The Maximum Total Economic Profit That Can Be Made by Colluding

question 107

Multiple Choice

The maximum total economic profit that can be made by colluding duopolists

• A) exceeds the economic profit made by a monopolist.
• B) bears no necessary relation to the economic profit made by a monopolist.
• C) is less than the economic profit made by a monopolist.
• D) equals the economic profit made by a monopolist.

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Definitions:

Gold Standard

A monetary system where a country's currency or paper money has a value directly linked to gold.

Managed Float

A currency exchange rate policy where a currency's value is allowed to fluctuate in response to foreign exchange market mechanisms, but the central bank may intervene to stabilize the currency if necessary.

Managed Floating

An exchange rate system where a country's currency value is allowed to fluctuate in response to foreign-exchange market mechanisms, but the central bank can intervene to prevent extreme fluctuations.