Which of these situations produces the largest profits for oligopolists?
A)The firms reach a Nash equilibrium.
B)The firms reach the monopoly outcome.
C)The firms reach the competitive outcome.
D)The firms produce a quantity of output that lies between the competitive outcome and the monopoly outcome.

Question

Quizplus · Accepted Answer

In an oligopoly, firms can maximize their profits by colluding to act like a monopoly, setting prices and output levels that maximize joint profits. This is the monopoly outcome.

Which of These Situations Produces the Largest Profits for Oligopolists