The very best joint outcome possible for the firms in a duopoly is to produce the
A) monopoly level of output.
B) perfectly competitive level of output.
C) amount of output that maximizes total revenue.
D) amount of output that minimizes total cost.
E) Nash equilibrium level of output if the game is not repeated.

Question

Quizplus · Accepted Answer

The best joint outcome for firms in a duopoly is to act like a monopolist and produce the monopoly level of output. This allows them to maximize their combined profits by reducing the total output to increase prices, as opposed to competing in quantities which would drive prices and profits down.

The Very Best Joint Outcome Possible for the Firms in a Duopoly