Suppose that two identical firms produce widgets and that they are the only firms in the market. The average and marginal cost is €6 for each firm. Price is determined by the following demand curve: P = 30 – Q where Q = Q1 + Q2. Suppose the two firms combine together and form a cartel. The output produced by each firm in the cartel is (assuming that they split the cartel output equally between them) A. 6 B. 12 C. 8 D. 4 Two identical firms compete in a market to sell a homogenous good with the following inverse demand function: P = 600 – 3Q. Each firm produces at a constant marginal cost of €300 and there are no fixed costs. The price that each firm in the Cournot equilibrium will charge is A. 400 B. 500 C. 300 D. 450
-
Suppose that two identical firms produce widgets and that they are the only firms in the market. The average and marginal cost is €6 for each firm.
Price is determined by the following
demand curve: P = 30 – Q where Q = Q1 + Q2.Suppose the two firms combine together and form a cartel. The output produced by each firm in the cartel is (assuming that they split the cartel output equally between them)
A. 6
B. 12
C. 8
D. 4
-
Two identical firms compete in a market to sell a homogenous good with the following inverse demand function: P = 600 – 3Q. Each firm produces at a constant marginal cost of €300 and there are no fixed costs.
The price that each firm in the Cournot equilibrium will charge is
A. 400
B. 500
C. 300
D. 450
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
