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.

---

Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its identifiable net assets.

Patent

A legal right granted by the government to an inventor, giving exclusive ownership of an invention for a certain period of time, prohibiting others from making, using, or selling it.

Copyright

Legal protection granted to the creators of original works, preventing unauthorized reproduction or distribution for a certain period.

Trademark

A sign, symbol, word, or phrase legally registered or established by use as representing a company or product.