(Scenario: Two Identical Firms)Use Scenario: Two Identical Firms

(Scenario: Two Identical Firms) Use Scenario: Two Identical Firms.Suppose the two firms decide to cooperate and collude,resulting in the same amount of production for each firm.What is the profit-maximizing price and output for the industry? Scenario: Two Identical Firms
Two identical firms make up an industry in which the market demand curve is represented by Q = 5,000 - 4P,where Q is the quantity demanded and P is price per unit.The marginal cost of producing the good in this industry is constant and equal to $650.Fixed cost is zero.

A) P = $400,Q = 5,000
B) P = $950,Q = 1,200
C) P = $600,Q = 1,500
D) P = $300,Q = 2,000

Correct Answer:

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