Once Firms in a Collusive Duopoly Start Cheating on the Agreed-Upon

question 39

Multiple Choice

Once firms in a collusive duopoly start cheating on the agreed-upon price, the cheating usually continues until the price is

• A) increased to the monopoly price
• B) driven down to marginal cost
• C) Neither answer is correct

---

Definitions:

Competitive Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a particular target market.

Crisis Management

A strategic approach for dealing with threats and challenges that can affect an organization's operations and reputation.

Government Recalls

Official orders for the return of products or goods due to safety concerns or defects, often issued by governmental consumer protection agencies.

Defective Product

An item that fails to meet quality standards or does not function as intended, often leading to recalls or consumer dissatisfaction.