Consider a duopoly with collusion.If the duopoly maximizes profit,
A)each firm will produce the same amount.
B)each firm will produce its maximum output possible.
C)industry marginal revenue will equal industry marginal cost at the level of total output.
D)industry demand will equal industry marginal cost at the level of total output.
E)price equals average total cost.

Question

Quizplus · Accepted Answer

In a duopoly with collusion, the firms act as a monopolist and jointly maximize profits. This means they will produce at a point where industry marginal revenue equals industry marginal cost, which is the level of total output. Therefore, choice C is the correct answer.

Consider a Duopoly with Collusion