The duopolists' dilemma occurs when firms in a duopoly coordinate ...

[lunatika]

The duopolists' dilemma occurs when firms in a duopoly coordinate their decisions to achieve the best possible outcome. Is the previous statement correct or incorrect? Why?
 
  What will be an ideal response?

Question 2

The deadweight loss due to a ________ is always smaller than the deadweight loss due to a ________.
 
  A) tax on each unit sold; per unit tax on each unit bought
  B) per unit tax on each unit sold; per unit tax on each unit bought
  C) tax on each unit sold; lump-sum tax
  D) lump-sum tax; tax on each unit bought

[lkoler]

Answer to Question 1

The statement is incorrect. The duopolists' dilemma occurs precisely because the firms do not coordinate their decisions and so the duopolists attain the worst combined outcome.

Answer to Question 2

D

[lunatika]

Thanks for the timely response, appreciate it

[debra928]

Excellent