Use the following to answer question:
Figure: Monopoly Profits in Duopoly
-(Figure: Monopoly Profits in Duopoly)Use Figure: Monopoly Profits in Duopoly.If there were two firms in this industry,they could engage in _____ and reap monopoly profits.
A)game theory
B)the prisoners' dilemma
C)collusive behavior
D)measuring the four-firm concentration ratio

Question

Use the following to answer question:
Figure: Monopoly Profits in Duopoly 
-(Figure: Monopoly Profits in Duopoly)Use Figure: Monopoly Profits in Duopoly.If there were two firms in this industry,they could engage in _____ and reap monopoly profits.
A)game theory 
B)the prisoners' dilemma 
C)collusive behavior 
D)measuring the four-firm concentration ratio

Quizplus · Accepted Answer

Collusive behavior refers to when two or more firms in an industry agree to act as a monopoly, often by setting prices or output levels. In this case, if the two firms were to collude, they could behave as a monopoly would and reap monopoly profits as shown in the graph.

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