Use the Following to Answer Question(s): Monopoly Through Collusion

Multiple Choice

Use the following to answer question(s) : Monopoly Through Collusion

-(Exhibit: Monopoly Through Collusion) The exhibit illustrates the situation in an industry that consists of two firms facing identical demand curves; the demand curve for each firm is D₁.Which of the following assumptions is part of the analysis illustrated by the model?

A) The two firms sell differentiated products.
B) The ATC curve of each firm lies exactly twice as high as the MC curve.
C) If the two firms collude in order to maximize their combined economic profits, each firm will operate as if its demand curve is given by D₂.
D) Both firms have the same marginal revenue curve.