
Scenario 17-1
Assume that the countries of Irun and Urun are the only two producers of crude oil.Further assume that both countries have entered into an agreement to maintain certain production levels in order to maximize profits.In the world market for oil, the demand curve is downward sloping.
-Refer to Scenario 17-1.The fact that both countries have colluded to earn higher profit shows their desire to keep production at what level
A) higher than the competitive market level of output
B) lower than the Nash equilibrium level of output
C) equal to the competitive level of output
D) higher than the Nash equilibrium level of output
Correct Answer:
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