The maximum total economic profit that can be made by colluding duopolists
A)equals the economic profit made by a monopoly.
B)exceeds the economic profit made by a monopoly.
C)is less than the economic profit made by a monopoly.
D)is zero.
E)cannot be determined.

Question

Quizplus · Accepted Answer

The maximum total economic profit that can be made by colluding duopolists equals the economic profit made by a monopoly because, through collusion, the duopolists effectively operate as a single monopoly, maximizing their combined profits by reducing output and increasing prices, similar to a monopolist's strategy.

The Maximum Total Economic Profit That Can Be Made by Colluding