The maximum economic profit that can be made by a duopoly that colludes is equal to the
A) economic profit made by duopolists who cheat.
B) normal profit made by an oligopoly.
C) economic profit made by a monopoly.
D) normal profit made by firms in perfect competition.

Question

Quizplus · Accepted Answer

When a duopoly colludes, it can act like a monopoly, maximizing joint profits by setting prices and output levels similar to a monopolist, thus achieving economic profits equivalent to those of a monopoly.

The Maximum Economic Profit That Can Be Made by a Duopoly