If both firms in a duopoly cheat on a collusive agreement, the price ________ and both firms are ________.
A) falls; better off
B) rises; worse off
C) falls; worse off
D) rises; better off

Question

Quizplus · Accepted Answer

When both firms in a duopoly cheat on a collusive agreement, they increase output, leading to a fall in price. This results in both firms being worse off compared to if they had adhered to the collusive agreement.

If Both Firms in a Duopoly Cheat on a Collusive