Generally,long-run profits for firms that cheat on purely collusive agreements fall ________ the perfect competition,zero-economic-profit solution and the perfect competition,shared-monopoly-profit solution.
A)clearly outside of
B)at one side of
C)somewhere outside of
D)somewhere between

Question

Quizplus · Accepted Answer

Firms that cheat on purely collusive agreements tend to earn profits that fall somewhere between the zero-economic-profit outcome of perfect competition and the higher profits associated with a shared-monopoly arrangement. This is because cheating may allow a firm to capture more market share or charge slightly higher prices temporarily, but it does not fully replicate the monopoly profit scenario due to the breakdown of collusion and potential competitive responses.

Generally,long-Run Profits for Firms That Cheat on Purely Collusive Agreements