If a Duopoly Collusive Agreement Is Made That Maximizes Joint

question 57

Multiple Choice

If a duopoly collusive agreement is made that maximizes joint profit,

• A)each of the duopolists has no incentive to cheat on the agreement.
• B)each duopolist has the incentive to cheat on the duopoly agreement by lowering the price.
• C)each duopolist has the incentive to cheat on the agreement by increasing the price to make monopoly profit.
• D)there is no concern over the entrance of potential rivals, since they cannot decrease the duopolists' profit.
• E)the dominant strategy is to collude.

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Definitions:

Statement Of Owner's Equity

A financial statement detailing changes in the equity of a company's owner over a reporting period.

Capital Changes

Adjustments or alterations in the equity or ownership capital of a company, often due to investments, dividends, or profits.

Accounting Period

A specific period of time for which financial activities are recorded and reported, such as a month, quarter, or year.

Withdrawals

Withdrawals indicate the amount of money or assets taken out from a business by its owner(s) for personal use.