Equilibrium price and quantity for a collusive oligopoly are determined according to the intersection of the ____ curve and the horizontal sum of the short-run ____ curves for the oligopolists.

Question

Quizplus · Accepted Answer

In a collusive oligopoly, firms cooperate to maximize their joint profits. The intersection of the marginal revenue curve and the horizontal sum of the short-run marginal cost curves gives the level of output at which the joint profits are maximized. The corresponding price is determined by the demand curve. Therefore, the correct answer is B: marginal revenue and marginal cost.

Equilibrium Price and Quantity for a Collusive Oligopoly Are Determined