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Question 121

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Figure: Monopoly Profits in Duopoly Use the following to answer questions: Figure: Monopoly Profits in Duopoly -(Figure: Monopoly Profits in Duopoly) The figure Monopoly Profits in Duopoly shows how an industry consisting of two firms that face identical demand curves (D<sub>1</sub>) can collude to increase profits. If the firms collude to share the market demand equally, then each firm will act as if its demand curve is given by _____, while the market demand curve is given by _____. A) D<sub>1</sub>; MR<sub>2</sub> B) D<sub>2</sub>; D<sub>1</sub> C) D<sub>1</sub>; D<sub>2</sub> D) MR<sub>1</sub>; MR<sub>2</sub>
-(Figure: Monopoly Profits in Duopoly) The figure Monopoly Profits in Duopoly shows how an industry consisting of two firms that face identical demand curves (D1) can collude to increase profits. If the firms collude to share the market demand equally, then each firm will act as if its demand curve is given by _____, while the market demand curve is given by _____.


A) D1; MR2
B) D2; D1
C) D1; D2
D) MR1; MR2

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