Use the Following to Answer Question(s): Monopoly Through Collusion

question 101

Multiple Choice

Use the following to answer question(s) : Monopoly Through Collusion

-(Exhibit: Monopoly Through Collusion) Given the duopoly industry illustrated in the exhibit, if the two firms colluded to maximize their joint profits, the market price they would set would be _______ and each firm's economic profit would be _______ .

• A) P₂; given by the area of the rectangle bounded by P₁P₂EF = FEBG
• B) P₁; P₁P₃AF
• C) P₃; given by the area of the rectangle bounded by 0P₃AQ₁
• D) P₂; given by the area of the rectangle bounded by P₁P₂BG

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