Use the following to answer questions: Figure: Monopoly Profits in Duopoly -(Figure: Monopoly Profits in Duopoly) The figure Monopoly Profits in Duopoly shows how an industry consisting of two firms that face identical demand curves (D₁) can collude to increase profits. Which of the following assumptions is NOT a part of the analysis illustrated by the model? A) The two firms are identical. B) The two firms sell identical products. C) While the firms face the same MC curves, their respective TC curves have unequal slopes. D) Each firm has a horizontal marginal cost curve.

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The assumption that the firms have identical demand curves and can collude implies they have similar cost structures, including total cost curves with equal slopes.

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