An industry consists of two identical firms with total costs of TC=5q+0.5q^2. Market demand is given by P-125-Q, marginal revenue of a monopolist is MR=125-2Q, and marginal costs are given by MC=5+Q. If the two firms decide to form a cartel, how much profit will each firm make? 1400 1350 1500 1000

An industry consists of two identical firms with total costs of TC=5q+0.5q^2. Market demand is given by P-125-Q, marginal revenue of a monopolist is MR=125-2Q, and marginal costs are given by MC=5+Q. If the two firms decide to form a cartel, how much profit will each firm make? 1400 1350 1500 1000

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter24: Monopolistic Competition, Oligopoly, And Game Theory

Section: Chapter Questions

Problem 5QP

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Question

An industry consists of two identical firms with total costs of TC=5q+0.5q^2. Market demand is given by P=125-Q, marginal revenue
of a monopolist is MR=125-2Q, and marginal costs are given by MC=5+Q. If the two firms decide to form a cartel, how much profit
will each firm make?
1400
1350
1500
1000

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