. Page> of 2ZOOM +1. Suppose there are only two firms in the market, firm X and firm Y. Theaccompanying table shows the market demand schedule. The only costs are fixedcosts, so the firms maximize profit by maximizing revenue.Quantity300Price98400750066007004800390021000111001200a. If both firms collude, how much will be produced for the entire market? Whatwill be the market price?b. If both firms collude and share the output equally, what is the revenue to eachof the firms?c. Suppose firm X cheats by producing 100 more units. Firm Y doesn't changethe amount they produce. What is the revenue to firm Y? To firm X?d. In retaliation for the cheating by firm X, firm Y also produces 100 more units.What is the revenue to firm X? To firm Y?e. Based on the demand schedule above, calculate the demand schedule that firmX would face if it suspected firm Y was going to produce 300, 400, or 500units.PriceY produces 300Y produces 400Y produces 5009876431Tiqueo Page> of 2ZOOM +500600700480039001000111001200a. If both firms collude, how much will be produced for the entire market? Whatwill be the market price?b. If both firms collude and share the output equally, what is the revenue to eachof the firms?c. Suppose firm X cheats by producing 100 more units. Firm Y doesn't changethe amount they produce. What is the revenue to firm Y? To firm X?d. In retaliation for the cheating by firm X, firm Y also produces 100 more units.What is the revenue to firm X? To firm Y?e. Based on the demand schedule above, calculate the demand schedule that firmX would face if it suspected firm Y was going to produce 300, 400, or 500units.PriceY produces 300Y produces 400Y produces 5009865431f. Figure out the profit-maximizing amount of spring water for Firm X toproduce in response.

Assuming two firms are there X and Y , production happens only with fixed cost and both the firm…

will be the market price? If both firms collude and share the output equally, what is the revenue to each of the firms? Suppose firm X cheats by producing 100 more units. Firm Y doesn't change the amount they produce. What is the revenue to firm Y? To firm X? In retaliation for the cheating by firm X, firm Y also produces 100 more units. What is the revenue to firm X? To firm Y? Based on the demand schedule above, calculate the demand schedule that firm X would face if it suspected firm Y was going to produce 300, 400, or 500 units,

will be the market price? If both firms collude and share the output equally, what is the revenue to each of the firms? Suppose firm X cheats by producing 100 more units. Firm Y doesn't change the amount they produce. What is the revenue to firm Y? To firm X? In retaliation for the cheating by firm X, firm Y also produces 100 more units. What is the revenue to firm X? To firm Y? Based on the demand schedule above, calculate the demand schedule that firm X would face if it suspected firm Y was going to produce 300, 400, or 500 units,

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.2P

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