Suppose That the Duopolists Competing in Cournot Fashion Agree to Produce

question 49

Multiple Choice

Suppose that the duopolists competing in Cournot fashion agree to produce the collusive output. Given that firm 2 commits to this collusive output, it pays firm 1 to:

• A) cheat by producing a higher level of output.
• B) cheat by producing a lower level of output.
• C) cheat by raising prices.
• D) None of the answers is correct.

---

Definitions:

Presupposes

Refers to something assumed or taken for granted in advance as a basis for argument or discussion.

Conception

The process of forming a general idea or notion that represents something, often the beginning of the thought process.

Afterlife

A belief in a life or existence that follows after death, often found in various religious and philosophical traditions.

Significance

The quality of being worthy of attention or importance.