Whenever a cartel in a duopoly breaks down,
A)both firms obtain higher profits.
B)total output in the market will rise.
C)price in the market will rise.
D)the socially optimal output will be produced.

Question

Whenever a cartel in a duopoly breaks down,​
A)​both firms obtain higher profits.
B)​total output in the market will rise.
C)​price in the market will rise.
D)​the socially optimal output will be produced.

Quizplus · Accepted Answer

When a cartel in a duopoly breaks down, each firm starts to act independently to maximize its own profit, leading to increased competition. This typically results in increased production to capture more market share, thereby increasing total output in the market.

Whenever a Cartel in a Duopoly Breaks Down,​

Whenever a Cartel in a Duopoly Breaks Down,