2. Suppose the duopolists producing homogeneous products face the following market demandcurveP=80-Q where Q=Q, +Q,TC = 200, and TC, =10Q,%3DSuppose they compete by simultaneously choosing output, what price will each firmchoose? How much will each firm produce? And how much profit will each firm make?

Given: P=80-Q whereQ=Q1+Q2AndTC1=20Q1 and TC2=10Q1

2. Suppose the duopolists producing homogeneous products face the following market demand curve P=80-Q where Q= Q, +Q, G= 200, and TC, =10Q, Suppose they compete by simultaneously choosing output, what price will each firm choose? How much will each firm produce? And how much profit will each firm make?

2. Suppose the duopolists producing homogeneous products face the following market demand curve P=80-Q where Q= Q, +Q, G= 200, and TC, =10Q, Suppose they compete by simultaneously choosing output, what price will each firm choose? How much will each firm produce? And how much profit will each firm make?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 20RQ: How can a monopolist identify the profit-maximizing level of output if it knows its total revenue...

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Similar questions

Consider the curve in the figure below, which shows the market demand. marginal cost, and marginal revenue curve for firms in an oligopolistic industry. In this example, we assume firms have zero fixed costs. Suppose the firms collude to form a cartel. What price will the cartel charge? What quantity will the cartel supply? How much profit will the cartel earn? Suppose now that the cane] breaks up and the oligopolistic firms compete as vigorously as possible by cutting the price and increasing sales. What will be the industry quantity and price? What will be the collective profits of all firms in the industry? Compare the equilibrium price, quantity, and profit for the cartel and cutthroat competition outcomes.
What stops oligopolists from acting together as a monopolist and earning the highest possible level of profits?
When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.
Continuing with the scenario in question 1, in the long run, the positive economic profits that the monopolistic competitor earns will attract a response either from existing firms in the industry or film outside. As those films capture the original films profit, what will happen to the original films profit-maximizing price and output levels?
Suppose that, due to a successful advertising campaign, a monopolistic competitor experiences an increase in demand for its product. How will that affect the price it charges and the quantity it supplies?
Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?
How does the demand curve perceived by a monopolist compare with the market demand curve?