In a duopoly if the firms have agreed to jointly maximize profits, then each firm can increase its current profits by producing more.

Question

Quizplus · Accepted Answer

If the firms have agreed to maximize profits jointly, then they will take into account the effect of their actions on the profits of the other firm. In this case, producing more may result in lower profits for the other firm, which would not be in line with the joint profit maximization strategy.

In a Duopoly If the Firms Have Agreed to Jointly