Gotcha, the only seller of stun guns, faces the inverse market demand curve, P = 400 - 120, where Q measures the number of stun guns sold per day, and P is the price per stun gun. The marginal cost is constant at $64. Suppose a new firm, Ouchy, enters the stun gun market. Ouchy's marginal cost is also constant at $64. Gotcha and Ouchy agree to form a cartel and evenly split the market output. Gotcha holds to the agreement, but Ouchy decides to produce 5 more stun guns than its level under the cartel agreement. In this case, the market price is $. 172 192 232 205
Gotcha, the only seller of stun guns, faces the inverse market demand curve, P = 400 - 120, where Q measures the number of stun guns sold per day, and P is the price per stun gun. The marginal cost is constant at $64. Suppose a new firm, Ouchy, enters the stun gun market. Ouchy's marginal cost is also constant at $64. Gotcha and Ouchy agree to form a cartel and evenly split the market output. Gotcha holds to the agreement, but Ouchy decides to produce 5 more stun guns than its level under the cartel agreement. In this case, the market price is $. 172 192 232 205
Chapter11: Monopolistic Competition, Oligopoly, And Game Theory
Section: Chapter Questions
Problem 4WNG
Related questions
Question
![Gotcha, the only seller of stun guns, faces the inverse market demand curve, P = 400 - 120, where Q measures the number
of stun guns sold per day, and P is the price per stun gun. The marginal cost is constant at $64. Suppose a new firm, Ouchy,
enters the stun gun market. Ouchy's marginal cost is also constant at $64. Gotcha and Ouchy agree to form a cartel and
evenly split the market output. Gotcha holds to the agreement, but Ouchy decides to produce 5 more stun guns than its level
under the cartel agreement. In this case, the market price is $.
172
192
232
205](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9e0b8b1b-26f3-4910-90ae-e2cf5fb4966e%2F2266add9-a047-488d-bbe9-4e9edb939896%2F37qvh7cl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Gotcha, the only seller of stun guns, faces the inverse market demand curve, P = 400 - 120, where Q measures the number
of stun guns sold per day, and P is the price per stun gun. The marginal cost is constant at $64. Suppose a new firm, Ouchy,
enters the stun gun market. Ouchy's marginal cost is also constant at $64. Gotcha and Ouchy agree to form a cartel and
evenly split the market output. Gotcha holds to the agreement, but Ouchy decides to produce 5 more stun guns than its level
under the cartel agreement. In this case, the market price is $.
172
192
232
205
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