Consider a oligopoly with two firms. Each firm has constant marginal cost of 3 dollar per unit and zero fixed costs. Suppose the market demand curve is P=15-Q, where Q=Q₁ + Q2 is the sum of the quantities produced by both firms. Suppose each firm can produce either 1, 2, 3, or 4 units. Which of the following is an optimal collusive outcome for the firms? O Each firm produces 2 units. Each firm produces 4 units. Each firm produces 3 units. O Each firm produces 1 unit.

Consider a oligopoly with two firms. Each firm has constant marginal cost of 3 dollar per unit and zero fixed costs. Suppose the market demand curve is P=15-Q, where Q=Q₁ + Q2 is the sum of the quantities produced by both firms. Suppose each firm can produce either 1, 2, 3, or 4 units. Which of the following is an optimal collusive outcome for the firms? O Each firm produces 2 units. Each firm produces 4 units. Each firm produces 3 units. O Each firm produces 1 unit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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