Figure: Monopoly Profits in Duopoly
(Figure: Monopoly Profits in Duopoly) The figure Monopoly Profits in Duopoly illustrates the situation in which an industry consisting of two firms that face identical demand curves (D1) can collude to increase profits.If the firms collude and agree to share the market demand equally, then each firm will act as if its marginal revenue curve is given by:
A) MR1.
B) 2 × MR1.
C) MR2.
D) MC.
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