How might collusion assist the two firms in this case

Reference no: EM131142270

Consider two oligopolists, each choosing between a "high" and a "low" level of production. Given their
choices of how much to produce, their profits will be as follows:

Explain how firm B will reason that it makes sense to produce the high amount, regardless of what firm A chooses. Then explain how firm A will reason that it makes sense to produce the high amount, regardless of what firm B chooses. How might collusion assist the two firms in this case?

Reference no: EM131142270

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