Use the following to answer questions: Figure: Monopoly Profits in Duopoly -(Figure: Monopoly Profits in Duopoly) Suppose the duopoly industry illustrated in the figure Monopoly Profits in Duopoly produces a perishable good. If the industry is perfectly competitive, the market price will likely end up being _____, and the combined economic profits of the firms will be _____. A) P₁; given by the area of the rectangle bounded by 0P₁CQ₄ B) P₁; zero C) P₃; given by the area of the rectangle bounded by 0P₃AQ₁ D) P₂; given by the area of the rectangle bounded by P₁P₂GB

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In perfect competition, the market price will be equal to the marginal cost, which is P1. At this price, the combined economic profits of the firms will be zero.

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