[34] Consider a market with two firms, A and B. Firm A's marginal cost is: MCA = 100+qA, while firm B's marginal cost is: MCB = 80 + 2qB. Striking up a cartel agreement, these firms collectively decide to produce 150 units (i.e., 150 = 9A + 9B). Wishing to maximize their joint (cartel) profit, quotas should be set such that A produces more than B.
[34] Consider a market with two firms, A and B. Firm A's marginal cost is: MCA = 100+qA, while firm B's marginal cost is: MCB = 80 + 2qB. Striking up a cartel agreement, these firms collectively decide to produce 150 units (i.e., 150 = 9A + 9B). Wishing to maximize their joint (cartel) profit, quotas should be set such that A produces more than B.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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can you please answer 34 please
![[34] Consider a market with two firms, A and B. Firm A's marginal cost is: MCA = 100+qA, while firm
B's marginal cost is: MCB = 80 + 2qB. Striking up a cartel agreement, these firms collectively decide to
produce 150 units (i.e., 150 = 9A + 9B). Wishing to maximize their joint (cartel) profit, quotas should be set
such that A produces more than B.
A.
B.
True
False
[35] A firm will not want to move from being a Cournot producer to a Stackelberg follower because its
profit will most likely decrease.
A.
B.
True
False](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb8858dad-0674-4e88-b427-562a7231d1ca%2Fd2f21134-86c5-4c52-b17d-5720a90aa411%2F0t5npjm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[34] Consider a market with two firms, A and B. Firm A's marginal cost is: MCA = 100+qA, while firm
B's marginal cost is: MCB = 80 + 2qB. Striking up a cartel agreement, these firms collectively decide to
produce 150 units (i.e., 150 = 9A + 9B). Wishing to maximize their joint (cartel) profit, quotas should be set
such that A produces more than B.
A.
B.
True
False
[35] A firm will not want to move from being a Cournot producer to a Stackelberg follower because its
profit will most likely decrease.
A.
B.
True
False
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