If a Certain Market Were a Monopoly, Then the Monopolist

question 89

Multiple Choice

If a certain market were a monopoly, then the monopolist would maximize its profit by producing 4,000 units of output. If, instead, that market were a duopoly, then which of the following outcomes would be most likely if the duopolists successfully collude?

• A)Each duopolist produces 4,000 units of output.
• B)Each duopolist produces 1,500 units of output.
• C)One duopolist produces 2,400 units of output and the other produces 1,600 units of output.
• D)One duopolist produces 3,000 units of output and the other produces 1,500 units of output.

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Definitions:

Profits Maximization

Aiming to achieve the highest possible profits through decision-making related to business operations and finance.

Price Elasticity

A measure of how much the demand for a good or service changes in response to a change in its price.

Marginal Cost

The extra expense associated with manufacturing an additional unit of a product or service.

Japanese Firm

A business entity operating in Japan, characterized by specific cultural, management, and operational practices distinct to the Japanese economic and business environment.