Joe's Body Shop and Bryan's Body Shop are operating in a duopoly. Joe and Bryan meet and decide to charge the same prices. Joe and Bryan can expect that:

Question

Quizplus · Accepted Answer

When firms in a duopoly agree to charge the same prices, they can effectively reduce competition between them and potentially act like a monopoly, allowing them to earn higher profits than they would if they were competing aggressively on prices. This strategy is akin to collusion, where firms coordinate their actions to increase their market power and profitability.

Joe's Body Shop and Bryan's Body Shop Are Operating in a Duopoly