An Agreement Between Two Duopolists to Function as a Monopolist

question 166

Multiple Choice

An agreement between two duopolists to function as a monopolist usually breaks down because

• A) they cannot agree on the price that a monopolist would charge.
• B) they cannot agree on the output that a monopolist would produce.
• C) each duopolist wants a larger share of the market in order to capture more profit.
• D) each duopolist wants to charge a higher price than the monopoly price.

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Definitions:

Primary Benefit Test

A legal principle used to determine who is primarily benefited by a service or transaction, often applied in labor law and contract disputes.

Common Law Negligence

A legal principle that imposes a duty to act with the care and diligence that a reasonably prudent person would under the same circumstances, where failure to do so results in harm or damage to another.

Restatement (Second) of Torts

The Restatement (Second) of Torts is a legal treatise from the American Law Institute that summarizes the general principles of common law torts in the United States.

Professional Negligence

The failure of a professional to perform their services with the skill and care that should be exercised by competent professionals in the same field, leading to harm.