Use the Following to Answer Questions

question 118

Multiple Choice

Use the following to answer questions:
Figure: Monopoly Profits in Duopoly
-(Figure: Monopoly Profits in Oligopoly) Firms in the duopoly industry illustrated in the figure Monopoly Profits in Duopoly have zero fixed costs. The market demand curve is D₂. If the two firms colluded to maximize their combined economic profits, they would set the market price at _____, and combined economic profits of the firms would be _____.

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

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Definitions:

Supercontinent

A massive landmass consisting of all, or nearly all, of the Earth's continents merged together, which has formed and broken apart several times in Earth's history.

Rodinia

An inferred supercontinent, consisting of all the continents joined, that existed near the Precambrian-Paleozoic boundary.

Taconic Orogeny

An early Paleozoic orogeny that occurred in the northern Appalachians and is interpreted to represent a collision between an island arc and North America.

Acadian Orogeny

A middle Paleozoic mountain-building event in eastern North America; occurred when a series of landmasses, referred to as Avalonia, collided with the eastern coast of North America.