Refer to the Diagram, Where the Numerical Data Show Profits

question 333

Multiple Choice

Refer to the diagram, where the numerical data show profits in millions of dollars. Beta's profits are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. If Alpha and Beta agree to a high-price policy through collusion, the temptation to cheat on that agreement is demonstrated by the fact that

• A)Beta can increase its profit by lowering its price.
• B)Beta can increase its profit by increasing its price still further.
• C)both Alpha and Beta can earn even more profits if both agree to a low-price policy.
• D)Alpha can increase its profit by reducing its production costs.