If firms in a duopoly can successfully collude
A) each firm can earn an economic profit.
B) the industry, that is, both firms taken together, can earn the maximum economic profit.
C) the firms achieve a cooperative equilibrium.
D) All of the above answers are true.

Question

Quizplus · Accepted Answer

If firms in a duopoly successfully collude, they can set prices and output levels to maximize joint profits, leading to economic profits for each firm, achieving a cooperative equilibrium, and maximizing industry profits.

If Firms in a Duopoly Can Successfully Collude