The maximum economic profit that can be made by a duopoly that colludes is equal to the _______
A) normal profit made by an oligopoly
B) economic profit made by a monopoly
C) economic profit made by duopolists who cheat
D) normal profit made by firms in perfect competition

Question

Quizplus · Accepted Answer

When a duopoly colludes, the firms act together as a monopoly, setting prices and output to maximize their combined profits. Therefore, the maximum economic profit they can make is equivalent to the economic profit made by a monopoly.

The Maximum Economic Profit That Can Be Made by a Duopoly