Ann and Bruce Each Own a Pizza Store in Frostbite

Ann and Bruce each own a pizza store in Frostbite Falls, Minnesota.Demand for pizza is given by Q = 200 - 10P.Having the only two pizza stores in Frostbite Falls, they attempt to profitably split the market without violating the Sherman Antitrust Act.Each has the cost function C = 50 + 5Q.If Ann and Bruce behave as duopolists, each earns a profit of

A) $0.
B) $200.
C) $500
D) $500.
E) $562.50.

Correct Answer:

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