An industry consists of two identical firms with total costs of TC=5q+0.5q^2. Market demand is given by P-125-Q, marginal revenue of a monopolist is MR=125-2Q, and marginal costs are given by MC=5+Q. If the two firms decide to form a cartel, how much profit will each firm make? 1400 1350 1500 1000
An industry consists of two identical firms with total costs of TC=5q+0.5q^2. Market demand is given by P-125-Q, marginal revenue of a monopolist is MR=125-2Q, and marginal costs are given by MC=5+Q. If the two firms decide to form a cartel, how much profit will each firm make? 1400 1350 1500 1000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:An industry consists of two identical firms with total costs of TC=5q+0.5q^2. Market demand is given by P=125-Q, marginal revenue
of a monopolist is MR=125-2Q, and marginal costs are given by MC=5+Q. If the two firms decide to form a cartel, how much profit
will each firm make?
1400
1350
1500
1000
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