This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: There are only two firms in an industry with demand curves q1 = 30 - P and q2 = 30 - P. Both have no ... (Read 47 times)

HudsonKB16

  • Hero Member
  • *****
  • Posts: 535
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
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mmj22343

  • Sr. Member
  • ****
  • Posts: 297
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.
Answer Preview
Only 29% of students answer this correctly


HudsonKB16

  • Hero Member
  • *****
  • Posts: 535
Reply #2 on: Jul 1, 2018
Thank you :)


mmj22343

  • Sr. Member
  • ****
  • Posts: 297
Reply #3 on: Jul 1, 2018
Happy to help you


« previous next »
 

Did you know?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

Did you know?

Patients should never assume they are being given the appropriate drugs. They should make sure they know which drugs are being prescribed, and always double-check that the drugs received match the prescription.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

Did you know?

It is widely believed that giving a daily oral dose of aspirin to heart attack patients improves their chances of survival because the aspirin blocks the formation of new blood clots.

The Rotation Curves of Four Spiral Galaxies The Rotation Curves of Four Spiral Galaxies
Many ideologies stem from older theories. The ideas of the philosophers are simplified. Ideologies Many ideologies stem from older theories. The ideas of the philosophers are simplified. Ideologies
Cooperative vs. noncooperative O2-binding curves Cooperative vs. noncooperative O2-binding curves
Cooperative vs. noncooperative O2-binding curves Cooperative vs. noncooperative O2-binding curves
The growth in demand for oil in China is driven by the growth in demand for personal transport The growth in demand for oil in China is driven by the growth in demand for personal transport
Food policy can drive the food industry Food policy can drive the food industry
Video: Elementary kinetics

For a complete list of videos, visit our video library