The table shows the demand curve for monster trucks. There are two monster truck producers. For simplicity, assume that the cost of producing a monster truck is zero. (AC=0, FC=0) Q demanded Price 1 $18 2 $16 3 $14 4 $12 5 $10 6 $9 7 $7 8 $6 9 $5 Assume the two producers initially collude to maximize profits, splitting production and profits evenly. What price will they charge? $___________ What is the total quantity produced? __________monster trucks What are the profits for each firm? $___________
The table shows the demand curve for monster trucks. There are two monster truck producers. For simplicity, assume that the cost of producing a monster truck is zero. (AC=0, FC=0) Q demanded Price 1 $18 2 $16 3 $14 4 $12 5 $10 6 $9 7 $7 8 $6 9 $5 Assume the two producers initially collude to maximize profits, splitting production and profits evenly. What price will they charge? $___________ What is the total quantity produced? __________monster trucks What are the profits for each firm? $___________
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 13CQ
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The table shows the demand curve for monster trucks. There are two monster truck producers. For simplicity, assume that the cost of producing a monster truck is zero. (AC=0, FC=0)
Q demanded | Price |
---|---|
1 | $18 |
2 | $16 |
3 | $14 |
4 | $12 |
5 | $10 |
6 | $9 |
7 | $7 |
8 | $6 |
9 | $5 |
Assume the two producers initially collude to maximize profits, splitting production and profits evenly.
What price will they charge?
$___________
What is the total quantity produced?
__________monster trucks
What are the profits for each firm?
$___________
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