8. The table shows the monthly demand schedule for a good in a duopoly market. The two producers in this market each faces $6,000 of fixed costs per month. There are no marginal costs. What is the monthly profit for each duopolist if they evenly split the quantity a monopolist would produce?Suppose duopolist A decides to increase production by 200 units. How much will each duopolist produce and what price will they charge? How much profit will each duopolist earn? Quantity02004006008001,0001,2001,4001,600Price ($)4035302520151050Totalrevenue ($)07,00012,00015,00016,00015,00012,0007,0000Marginalrevenue ($)3525155-5-15-25-35

The term "marginal cost" describes the rise or fall in price associated with producing or providing…

Answered: The table shows the monthly demand…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter22: Contemporary Issues In The U.s. Economy

Section: Chapter Questions

Problem 5DQ

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8. The table shows the monthly demand schedule for a good in a duopoly market. The two producers in this market each faces $6,000 of fixed costs per month. There are no marginal costs.

What is the monthly profit for each duopolist if they evenly split the quantity a monopolist would produce?
Suppose duopolist A decides to increase production by 200 units. How much will each duopolist produce and what price will they charge? How much profit will each duopolist earn?

Quantity
0
200
400
600
800
1,000
1,200
1,400
1,600
Price ($)
40
35
30
25
20
15
10
50
Total
revenue ($)
0
7,000
12,000
15,000
16,000
15,000
12,000
7,000
0
Marginal
revenue ($)
35
25
15
5
-5
-15
-25
-35

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