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) Given the duopoly industry illustrated in the exhibit, if the two firms colluded to maximize their combined economic profits, the market price they would set would be _______ and combined economic profits of the firms would be _______ .

A) P₁; given by the area of the rectangle bounded by 0P₁CQ₄
B) P₁; zero
C) P₃; given by the area of the rectangle bounded by 0P3AQ₁
D) P₂; given by the area of the rectangle bounded by P₁P₂BG