The table shows the demand schedule for bushels of pears sold by two farms, ABC and XYZ. Pear Duopoly Price $10 9 8 7 6 5 4 3 2 1 Quantity 0 50 100 150 200 250 300 350 400 450 Assume that the marginal cost of selling the pears is zero. Suppose the two farms have agreed to maximize industry profit and split the profit evenly. If ABC decides to cheat on the agreement and produce 175 bushels while XYZ abides by the agreement, what will be each farm's level of profit? Both farms will earn $700 profit. XYZ will earn $500 and ABC will earn $700. ABC will earn $500 and XYZ will earn $700. Both farms will earn $500 profit.

The table shows the demand schedule for bushels of pears sold by two farms, ABC and XYZ. Pear Duopoly Price $10 9 8 7 6 5 4 3 2 1 Quantity 0 50 100 150 200 250 300 350 400 450 Assume that the marginal cost of selling the pears is zero. Suppose the two farms have agreed to maximize industry profit and split the profit evenly. If ABC decides to cheat on the agreement and produce 175 bushels while XYZ abides by the agreement, what will be each farm's level of profit? Both farms will earn $700 profit. XYZ will earn $500 and ABC will earn $700. ABC will earn $500 and XYZ will earn $700. Both farms will earn $500 profit.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.3P

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