Suppose a few powerful firms control all production in an industry and face identical demand and cost schedules.If they successfully collude and maximize joint profits,then price,output,and profit levels in the industry will be the same as those in:
A) pure monopoly.
B) regulated monopoly.
C) monopolistic competition.
D) an oligopoly with a kinked-demand curve.

Question

Quizplus · Accepted Answer

When firms collude to maximize joint profits, they effectively act as a single entity, similar to a pure monopoly, setting prices and output to maximize profits.

Suppose a Few Powerful Firms Control All Production in an Industry