Firms in a duopoly situation may collude to choose the monopoly solution to the determination of quantity to produce and the price at which to sell their products.

Question

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Firms in a duopoly may come together to collude and act as a monopoly, which involves making joint decisions on the quantity to produce and the price to charge, thus earning maximum profits.

Firms in a Duopoly Situation May Collude to Choose the Monopoly