The following statements describe a cooperative equilibrium in an oligopoly where the firms are jointly maximizing profits by restricting output. Which statement is false?
A) P > MC for each individual firm.
B) An individual firm could increase profits by cheating.
C) No individual firm will have an incentive to change output.
D) MR > MC for each individual firm.
E) The firms in the industry will jointly be earning monopoly profits.
Correct Answer:
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