Consider a duopolistic market with an inverse demand curve P(Q) = 460 − 4Q and constant marginal costs for each firm that are given by MC(Q) = 10. Assume fixed costs are negligible. The two identical firms are competing in this market by choosing their production quantities simultaneously. In the equilibrium, each firm produces 37.5 units and the prevailing market price is 160. How would the joint profits of these two firms change if they s
Consider a duopolistic market with an inverse demand curve P(Q) = 460 − 4Q and constant marginal costs for each firm that are given by MC(Q) = 10. Assume fixed costs are negligible. The two identical firms are competing in this market by choosing their production quantities simultaneously. In the equilibrium, each firm produces 37.5 units and the prevailing market price is 160. How would the joint profits of these two firms change if they s
Chapter11: Monopolistic Competition, Oligopoly, And Game Theory
Section: Chapter Questions
Problem 4WNG
Related questions
Question
Consider a duopolistic market with an inverse demand curve P(Q) = 460 − 4Q
and constant marginal costs for each firm that are given by MC(Q) = 10.
Assume fixed costs are negligible. The two identical firms are competing in this market by choosing their production quantities simultaneously. In the equilibrium, each firm produces
and constant marginal costs for each firm that are given by MC(Q) = 10.
Assume fixed costs are negligible. The two identical firms are competing in this market by choosing their production quantities simultaneously. In the equilibrium, each firm produces
37.5 units and the prevailing market price is 160.
How would the joint profits of these two firms change if they successfully formed a cartel?
Change in joint profits: ?
(Enter your answer rounded to two decimal places; include a negative sign if appropriate.)
(Enter your answer rounded to two decimal places; include a negative sign if appropriate.)
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
Please pass question on to someone with more knowledge. I do not like using up my questions for wrong answers.
Solution
Recommended textbooks for you
![Microeconomics](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)
![Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
![Survey Of Economics](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)
![Microeconomics](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)
![Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
![Survey Of Economics](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)
![Micro Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613064/9781337613064_smallCoverImage.gif)
![Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc