Question 74 Table 18-4 Only two firms, ABC and XYZ, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost. Price (Dollars per unit) 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 $90 $140 $240 Quantity Demanded Total Revenue $280 (Units) Refer to Table 18-4. ABC and XYZ agree to maximize joint profits. However, while ABC produces the agreed-upon amount, XYZ breaks the agreement and produces 5 more than agreed. How much profit does XYZ make? 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 (Dollars) 0 130 240 330 400 450 480 490 480 450 400 330 240 130 0

Question 74 Table 18-4 Only two firms, ABC and XYZ, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost. Price (Dollars per unit) 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 $90 $140 $240 Quantity Demanded Total Revenue $280 (Units) Refer to Table 18-4. ABC and XYZ agree to maximize joint profits. However, while ABC produces the agreed-upon amount, XYZ breaks the agreement and produces 5 more than agreed. How much profit does XYZ make? 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 (Dollars) 0 130 240 330 400 450 480 490 480 450 400 330 240 130 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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