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Two Duopoly Firms That Sell an Identical Good Form a Cartel

Question 130

Multiple Choice

Two duopoly firms that sell an identical good form a cartel. They decide to collude and fix the price of their good. In this prisoners' dilemma type situation, the likely outcome is


A) only one will cheat.
B) neither one will cheat.
C) both will cheat.
D) It is impossible to say.

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