A two-firm coal cartel that produces at a constant marginal cost of £22 faces a market inverse demand curve of P= 102-0.47Q. Initially, both firms agree to act like a monopolist, each producing 42.55 tonnes of coal. If one of the firms cheats on the agreement (assuming the other firm is compliant and continues to produce at 42.55 tonnes), to within 2 decimal places (e.g. 1.92) the cheating firm will produce tonnes of coal.

A two-firm coal cartel that produces at a constant marginal cost of £22 faces a market inverse demand curve of P= 102-0.47Q. Initially, both firms agree to act like a monopolist, each producing 42.55 tonnes of coal. If one of the firms cheats on the agreement (assuming the other firm is compliant and continues to produce at 42.55 tonnes), to within 2 decimal places (e.g. 1.92) the cheating firm will produce tonnes of coal.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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