One of the most inefficient ways for duopolists to earn a profit is to engage in collusion or form a cartel.

Question

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Collusion or forming a cartel is actually a very efficient way for duopolists to earn a profit, as it allows them to jointly set prices and restrict output, leading to higher profits for the firms involved. However, it is often illegal and can be difficult to sustain over the long term due to the incentives for each firm to cheat and increase its own profits.

One of the Most Inefficient Ways for Duopolists to Earn