Which of the following statements is correct?

a. If duopolists successfully collude, then their combined output will be equal to the output that would be observed if the market were a monopoly,

b. Although the logic of self-interest decreases a duopoly's price below the monopoly price, it does not push the duopolists to reach the competitive price,

c. Although the logic of self-interest increases a duopoly's level of output above the monopoly level, it does not push the duopolists to reach the competitive level,

d. All of the above are correct.

d. All of the above are correct

The duopoly firms if collude with each other over the price of the commodities they can enjoy a complete monopoly over the market. If any firm breaks the collision and charges price below the decided price it will attract a greater target market and will result in an increase in the sale. As a chain effect, the other firm will also decrease the prices to attract the market. Overall the firms are selling at reduced prices with low decreased profits. Hence self- interest is not helpful if the firms have to reach a competitive firm.

In the same way, is one of the firms increases the level of output the other will follow it. As a result, the supply in the market will increase causing the prices to fall. The will be a decline in the profit by the firm and the firm will refrain from breaking the collusion in the first place.