Smalltown has 140 residents and two mobile phone providers: Verizon and AT&T Each firm's costs: FC = $0, MC = $10. Assume the two firms collude and share the profits equally. Assume Version cheats by signing up 10 more customers. What is the profits for each firm assuming AT&T does not respond? P Q TR TC Profit 45 50 40 60 35 70 30 80 25 90 20 100 15 110 10 120 5 130 140 AT&T make $750, Verizon makes $1,000 AT&T make $850, Verizon makes $950 AT&T make $700, Verizon makes $1,100 AT&T make $650, Verizon makes $1,400

Smalltown has 140 residents and two mobile phone providers: Verizon and AT&T Each firm's costs: FC = $0, MC = $10. Assume the two firms collude and share the profits equally. Assume Version cheats by signing up 10 more customers. What is the profits for each firm assuming AT&T does not respond? P Q TR TC Profit 45 50 40 60 35 70 30 80 25 90 20 100 15 110 10 120 5 130 140 AT&T make $750, Verizon makes $1,000 AT&T make $850, Verizon makes $950 AT&T make $700, Verizon makes $1,100 AT&T make $650, Verizon makes $1,400

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter16: Bargaining

Section: Chapter Questions

Problem 16.1IP

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