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Figure: Monopoly Profits in Duopoly
-(Figure: Monopoly Profits in Duopoly) Given the duopoly industry illustrated in the figure Monopoly Profits in Duopoly, if each firm acted on the belief that it faced demand curve D₂ and acted without consideration of the other, each firm would attempt to maximize economic profits by producing quantity _____ and setting price equal to _____.

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Figure: Monopoly Profits in Duopoly

-(Figure: Monopoly Profits in Duopoly) Given the duopoly industry illustrated in the figure Monopoly Profits in Duopoly, if each firm acted on the belief that it faced demand curve D₂ and acted without consideration of the other, each firm would attempt to maximize economic profits by producing quantity _____ and setting price equal to _____.

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In a duopoly, if each firm believes it faces the demand curve D2 independently, it will produce at the quantity where marginal cost equals marginal revenue for D2, which is Q2, and set the corresponding price P2.

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