Why might two companies in a duopoly consider coordinating their production?

Duopoly Coordination and Economic Impact

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Business
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10th Grade - University
•
Hard

Liam Anderson
FREE Resource
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10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
To restrict quantity and increase profits
To reduce legal risks
To diversify their products
To increase competition
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a characteristic of the cost structure for identical firms in a duopoly?
Unique production technologies
Different marginal cost curves
Varying fixed costs
Identical average total cost curves
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is the market marginal cost curve derived in a duopoly?
By subtracting one curve from the other
By averaging the individual cost curves
By doubling the individual cost curve horizontally
By adding the curves vertically
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens to the market demand curve when two firms coordinate like a monopoly?
It shifts to the right
It becomes steeper
It remains unchanged
It becomes flatter
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In a coordinated duopoly acting like a monopoly, where is the optimal quantity determined?
Where average cost equals average revenue
Where fixed cost equals variable cost
Where marginal cost equals marginal revenue
Where total cost equals total revenue
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the total economic profit if two firms in a duopoly coordinate perfectly?
250
500
750
1000
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why might a firm in a duopoly decide to cheat on a coordination agreement?
To reduce production costs
To comply with legal regulations
To increase its market share
To gain a higher economic profit
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