Use the Following to Answer Question

Multiple Choice

Use the following to answer question:
Figure: Monopoly Profits in Duopoly
-(Figure: Monopoly Profits in Duopoly) Use Figure: Monopoly Profits in Duopoly.The figure shows how an industry consisting of two firms that face identical demand curves (D₁) can collude to increase profits.The market demand curve is D_2. Which assumption is part of the analysis illustrated by the model?

A) The two firms have identical marginal cost but different average total cost.
B) The two firms sell differentiated products.
C) The MR curve is not relevant to either firm's choices.
D) The firms can act as a cartel and maximize their combined economic profit.