ustry. The demand curve for stophemes is given by p = 6,600 - 5q. h firm has one manufacturing plant and h firm i has a cost function Cq) = q²i, ere q; is the output of firm i. The two as form a cartel and arrange to split total ustry profits equally. Under this cartel ingement, they will maximize joint profits a) they produce a total of 600 units, no matter which firm produces them. b they produce a total of 440 units, no
ustry. The demand curve for stophemes is given by p = 6,600 - 5q. h firm has one manufacturing plant and h firm i has a cost function Cq) = q²i, ere q; is the output of firm i. The two as form a cartel and arrange to split total ustry profits equally. Under this cartel ingement, they will maximize joint profits a) they produce a total of 600 units, no matter which firm produces them. b they produce a total of 440 units, no
Chapter1: Making Economics Decisions
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Transcribed Image Text:There are two firms in the blastopheme
industry. The demand curve for
blastophemes is given by p = 6,600 - 5q.
Each firm has one manufacturing plant and
each firm i has a cost function Cq) = q?i,
where q; is the output of firm i. The two
firms form a cartel and arrange to split total
industry profits equally. Under this cartel
arrangement, they will maximize joint profits
if
a)
they produce a total of 600 units, no
matter which firm produces them.
b)
they produce a total of 440 units, no
matter which firm produces them.
c)
and only if each firm produces 300
units in its plant.
they shut down one of the two
d)
plants, having the other operate as a
monopoly and splitting the profits.
e)
and only if they each produce a total
blastophemes is given by p = 6,600 - 5q.
Each firm has one manufacturing plant and
each firm i has a cost function Cq) = q?i,
where q; is the output of firm i. The two
firms form a cartel and arrange to split total
industry profits equally. Under this cartel
arrangement, they will maximize joint profits
if
a)
they produce a total of 600 units, no
matter which firm produces them.
O b) they produce a total of 440 units, no
matter which firm produces them.
c)
and only if each firm produces 300
units in its plant.
they shut down one of the two
d)
plants, having the other operate as a
monopoly and splitting the profits.
e)
and only if they each produce a total
of 660 units.
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