Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions:
Figure: Monopoly Profits in Duopoly
-(Figure: Monopoly Profits in Duopoly) Given the duopoly industry illustrated in the figure Monopoly Profits in Duopoly, if each firm acted on the belief that it faced demand curve D₂ and acted without consideration of the other, each firm would attempt to maximize economic profits by producing quantity _____ and setting price equal to _____.

A) Q₄; P₁
B) Q₄; P₂
C) Q₁; P₄
D) Q₂; P₂