Author Question: In the scenario above, which of the following actions will maximize the industry's economic profit? ... (Read 12 times)

shenderson6 · **on:** Jun 29, 2018

In the scenario above, which of the following actions will maximize the industry's economic profit?

A) Both firms comply with the agreement.
B) Both firms cheat on the agreement, producing more than the agreed amount.
C) One of the firms complies with the agreement while the other firm cheats, producing more than the agreed amount.
D) Because the firms are colluding, the profit does not change regardless of whether the firms comply with agreement or cheat on the agreement.

Question 2

The table above shows the demand and total cost schedule for a monopolist hotel. What price should the monopolist charge if it is a single-price monopoly that maximizes its profit?

A) 171
B) 161
C) 151
D) 141