CFA Practice Question

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CFA Practice Question

An equilibrium in which the players make and share the monopoly profit is a ______

A. collusive agreement
B. contestable market
C. Nash equilibrium
D. cooperative equilibrium
Correct Answer: C

User Contributed Comments 6

User Comment
pavelopv why C? isn't monopolistic profit divided amoung players in collusive agreement?
At Nash equilibrium sum of profits of the players is less than monopolistic profit!
Am I mistaken?
Mikael If players SHARE the monopoly profit, they cooperate, which is not always the case in a Nash equilibrium. So, D is my answer.
Sabs Read the question guys, it say "An equilibrium....."
Its asking about the equilibrium not what kind of agreement.
JoeHoong Wow, "an equilibrium", tricky question..
dipu617 Thanks Sabs!!
fzhou It's "share the monopoly profit" that makes the questions tricky...
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