Use the Information Below to Answer the Following Questions

question 44

Multiple Choice

Use the information below to answer the following questions.
Fact 15.2.1
Two firms, FastNet and SmartCast are the only Internet providers in a city. They have identical costs and one firm's service is a perfect substitute for the other firm's service. The industry is a natural duopoly. FastNet and SmartCast decide to collude and agree to share the market equally.
-Refer to Fact 15.2.1. What is the result if both firms cheat on the agreement?

• A)Both firms make an economic profit that is less than if they had both complied with the agreement.
• B)Economic profit of both firms is maximized.
• C)Both firms are playing a game of chicken.
• D)Only one firm is playing a game of chicken.
• E)Market output decreases.

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Definitions:

Biopsy

A medical test involving the extraction of sample cells or tissues for examination to diagnose disease.

CA

A term often used to abbreviate cancer or carcinoma, indicating a variety of diseases characterized by the uncontrolled division of abnormal cells.

Meaning

The significance or understanding conveyed by a word, phrase, sentence, or text.

Lymphangiosarcoma

A rare and aggressive form of cancer that develops from the lymphatic system, often associated with chronic lymphedema.