Under a Cournot duopoly, the collusion curve represents:
A) all possible allocations of the pure monopoly quantity among the two firms in the duopoly.
B) all possible allocations of the pure monopoly quantity that would be possible if the two firms in the duopoly did not cooperate.
C) all optimal price-quantity outcomes for a cartel rather than a Cournot duopoly.
D) the potential profits to be earned by firms in a collusive cartel.

Question

Quizplus · Accepted Answer

The collusion curve represents all possible allocations of the pure monopoly quantity among the two firms in the duopoly, assuming they cooperate to maximize their combined profits, similar to a monopoly.

Under a Cournot Duopoly, the Collusion Curve Represents