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Question 230

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Use the following to answer questions: Use the following to answer questions: -(Table: Demand for Solar Water Heaters) Look at the table Demand for Solar Water Heaters. The marginal cost of producing solar water heaters is zero, and only two firms, Rheem and Calefi, produce them. Suppose they agree to produce only 25 water heaters each. If Rheem cheats on the agreement and produces 30 water heaters, what is the price effect for Rheem? A) -$1,000 B) -$2,500 C) $2,000 D) $1,000
-(Table: Demand for Solar Water Heaters) Look at the table Demand for Solar Water Heaters. The marginal cost of producing solar water heaters is zero, and only two firms, Rheem and Calefi, produce them. Suppose they agree to produce only 25 water heaters each. If Rheem cheats on the agreement and produces 30 water heaters, what is the price effect for Rheem?


A) -$1,000
B) -$2,500
C) $2,000
D) $1,000

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