The figure below shows the demand (D, MR) and cost (MC, ATC) curves for six oligopolies in the chewing gum industry. Assume that all 6 firms have the same identical cost curves. Demand and cost conditions for the Chewing Gum Industry .40 .35 Dollars .25 MC MR a. 12,000; $.40 b. 14,000; $.30 c. 16,000; $.35 d. 12,000; $.25 ATC D 0 12 14 16 Packs of chewing gum in thousands Suppose the six firms that produce chewing gum form a cartel. The cartel faces the market demand curve given by D in the figure above. To maximize profits, the cartel should produce packs of chewing gum and the price should be
The figure below shows the demand (D, MR) and cost (MC, ATC) curves for six oligopolies in the chewing gum industry. Assume that all 6 firms have the same identical cost curves. Demand and cost conditions for the Chewing Gum Industry .40 .35 Dollars .25 MC MR a. 12,000; $.40 b. 14,000; $.30 c. 16,000; $.35 d. 12,000; $.25 ATC D 0 12 14 16 Packs of chewing gum in thousands Suppose the six firms that produce chewing gum form a cartel. The cartel faces the market demand curve given by D in the figure above. To maximize profits, the cartel should produce packs of chewing gum and the price should be
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![The figure below shows the demand (D, MR) and cost (MC, ATC) curves for six
oligopolies in the chewing gum industry. Assume that all 6 firms have the same identical
cost curves.
Demand and cost conditions for the Chewing Gum Industry
$4
Dollars
.40
.35
.25
MC
MR
a. 12,000; $.40
b. 14,000; $.30
c. 16,000; $.35
d. 12,000; $.25
ATC
D
0
12 14 16
Packs of chewing gum in thousands
Suppose the six firms that produce chewing gum form a cartel. The cartel faces the
market demand curve given by D in the figure above. To maximize profits, the cartel
should produce
packs of chewing gum and the price should be](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7d8d092a-b738-4db5-9533-897dce711469%2F93c00f65-95d6-459c-8370-6ba507dcb55b%2Fpwpdc5n_processed.png&w=3840&q=75)
Transcribed Image Text:The figure below shows the demand (D, MR) and cost (MC, ATC) curves for six
oligopolies in the chewing gum industry. Assume that all 6 firms have the same identical
cost curves.
Demand and cost conditions for the Chewing Gum Industry
$4
Dollars
.40
.35
.25
MC
MR
a. 12,000; $.40
b. 14,000; $.30
c. 16,000; $.35
d. 12,000; $.25
ATC
D
0
12 14 16
Packs of chewing gum in thousands
Suppose the six firms that produce chewing gum form a cartel. The cartel faces the
market demand curve given by D in the figure above. To maximize profits, the cartel
should produce
packs of chewing gum and the price should be
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