Two local ready-mix cement manufacturers, H and T, have combined demand given by Q = 105 − P. Their total costs are given by TCH = 5QH + 0.5QH^2, and TCT = 5QT + 0.5QT^2. If they successfully collude, what is their maximum joint profits?
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Two local ready-mix cement manufacturers, H and T, have combined demand given by Q = 105 − P.
Their total costs are given by
TCH = 5QH + 0.5QH^2, and
TCT = 5QT + 0.5QT^2.
If they successfully collude, what is their maximum joint profits?
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- Two ready-to-eat breakfast cereal manufacturers, Lots of Sugar and Buckets of Goo, face combined demand for their products given by Q = 75 - P. Their total costs are given by TCLots of Sugar = 0.1Q2Lots of Sugar and TCBuckets of Goo = 5QBuckets of Goo. If they successfully collude, their total profits will be: a. $62.50 b. $1,250.00 c. $125.00 d. $287.50 e. $1,287.50Why have European steel firms not been split with the inherent costs of having significant market power?Q1: What is the price-equillibrium under the assumption of the two companies colluding? What is the profit for each firm? Q2: Derive the output reaction curves for both firms and calculate the price-output equllibrium under this assumption. What is the profit for each firm?
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