If Both Firms in a Duopoly Cheat on a Collusive

question 94

Multiple Choice

If both firms in a duopoly cheat on a collusive agreement, the price _______ and both firms are
_______.

• A) rises; better off
• B) falls; worse off
• C) rises; worse off
• D) falls; better off

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Definitions:

P(x = a)

The probability of a random variable x taking on a specific value a.

P(x = a)

The probability that the random variable X is equal to some value a.

Continuous Random Variable

A type of random variable that can take an infinite number of possible values in a continuum or interval on the number line.

P(x > a)

Represents the probability of a random variable X taking a value greater than a specific number a.