Suppose that all the ﬁrms in an oligopoly face the same horizontal marginal and average cost curves. If all these ﬁrms agree to co-operate, their joint proﬁts will be maximized by producing at the level where:

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In a scenario where firms in an oligopoly cooperate to maximize joint profits, the optimal production level is achieved where marginal revenue (MR) equals marginal cost (MC). This principle ensures that the last unit produced adds as much to revenue as it does to cost, maximizing profit.

Suppose That All the ﬁRms in an Oligopoly Face the Same