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Author Question: There are only two firms in an industry with demand curves q1 = 30 - P and q2 = 30 - P. Both have no ... (Read 45 times)

HudsonKB16

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on: Jul 1, 2018
There are only two firms in an industry with demand curves q1 = 30 - P and q2 = 30 - P. Both have no fixed costs and each has a marginal cost of 10 per unit produced. If they behave as profit-maximizing price takers, each produces 20 units and sells them at a price of 10 so that each firm makes zero economic profits. Suppose the two firms form a cartel. While firm 1 produces one-half of the profit-maximizing cartel output, firm 2 cheats and produces 5 units more. What would happen to the two firms' economic profits?
 
  A) Firm 1's profits remain the same, but firm 2's profits increase by 10.5
  B) Firm 1's profits decrease by 5.5, but firm 2's profits increase by 11.
  C) Firm 1's profits decrease by 25, but firm 2's profits increase by 12.5.
  D) Firm 1's profits decrease by 12.5, but firm 2's profits increase by 25.

Question 2

In the short run, the competitive firm will hire more labor if
 
  A) the wage rate increases.
  B) the price the firm receives for the output increases.
  C) the price the firm receives for the output decreases.
  D) a specific tax is imposed on the output.
Microeconomics ¦ Perloff ¦ 8th Edition
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mmj22343

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Reply #1 on: Jul 1, 2018
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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HudsonKB16

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Reply #2 on: Jul 1, 2018
Thank you :)


mmj22343

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Reply #3 on: Jul 1, 2018
Happy to help you


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