"If firms in duopoly collude and operate as a monopoly, the industry produces more output compared to the Nash equilibrium." True or false? Explain
What will be an ideal response?
The statement is false. In the Nash equilibrium, both firms cheat and output is the same as in perfect competition. If the firms operate as a monopoly, the industry's profit-maximizing level of output is below the competitive level.
Economics
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When people make decisions that go against their own interests, neoclassical economics explains this to be instances where people are:
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