In a duopoly with a collusive agreement and in a one- time only game, a firm's profit is largest if it
_______ The agreement and if the other firm _______ the agreement.

Question

Quizplus · Accepted Answer

In a one-time game with a collusive agreement, a firm maximizes its profit by cheating on the agreement while the other firm complies. This allows the cheating firm to capture more market share or sell at a better price while the other firm limits its output or keeps prices high as per the agreement.

In a Duopoly with a Collusive Agreement and in a One-