If a duopoly has reached the monopoly outcome,a firm can increase its profit if it and it alone ________ its price and ________ its production.

Question

Quizplus · Accepted Answer

If the duopoly has reached the monopoly outcome, it means the two firms have already reduced their output to reach a level of production that maximizes their joint profits. Therefore, increasing production will not increase profits any further. However, the firm can increase its profit by lowering its price, as a lower price will attract more consumers and increase the quantity sold. This will offset the reduction in price per unit and lead to an overall increase in profit.

If a Duopoly Has Reached the Monopoly Outcome,a Firm Can