The table shows the demand curve for monster trucks. There are two monster truck producers. For simplicity, assume that the cost of producing a monster truck is zero. (AC=0AC=0, FC=0FC=0)
The table shows the demand curve for monster trucks. There are two monster truck producers. For simplicity, assume that the cost of producing a monster truck is zero. (AC=0AC=0, FC=0FC=0)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
The table shows the
| Q demanded | |
|---|---|
| 11 | $18$18 |
| 22 | $16$16 |
| 33 | $14$14 |
| 44 | $12$12 |
| 55 | $10$10 |
| 66 | $9$9 |
| 77 | $7$7 |
| 88 | $6$6 |
| 99 | $5$5 |
Assume the two producers initially collude to maximize profits, splitting production and profits evenly.
What price will they charge?
$
What is the total quantity produced?
monster trucksmonster trucks
What are the profits for each firm?
$
If one of the producers produces an extra unit to get higher profits, what is the new market price?
$
What are the profits for this firm when it breaks the agreement?
$
What are the other firm's profits after the agreement is broken?
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