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 joint profits, the market price they would set would be _______ and each firm's economic profit would be _______ .

A) P₂; given by the area of the rectangle bounded by P₁P₂EF = FEBG
B) P₁; P₁P₃AF
C) P₃; given by the area of the rectangle bounded by 0P₃AQ₁
D) P₂; given by the area of the rectangle bounded by P₁P₂BG