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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.

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.


Statistical Theme: Financial statistics

Created on Thursday, January 3, 2002

Last updated on Thursday, March 6, 2003