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JOINT PROFIT MAXIMISATION

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Definition:
Joint profit maximization refers to a situation where members of a cartel, duopoly, oligopoly or similar market condition engage in pricing- output decisions designed to maximize the groups' profits as a whole. In essence, the member firms seek to act as a monopoly.

Context:
Note should be made that joint profit maximization does not necessarily entail collusion or an agreement among firms. The firms may independently adopt price-output strategies which take into account rival firms' reactions and thereby produce joint profit maximization.

Source Publication:
Glossary of Industrial Organisation Economics and Competition Law, compiled by R. S. Khemani and D. M. Shapiro, commissioned by the Directorate for Financial, Fiscal and Enterprise Affairs, OECD, 1993.

Hyperlink:
http://www.oecd.org/dataoecd/8/61/2376087.pdf

Statistical Theme: Financial statistics

Created on Thursday, January 03, 2002

Last updated on Thursday, March 06, 2003