Industry demand is given by: Q = 660 - P [with the provision that Q must be
Question:
All firms in the industry have identical cost structures - the industry's total cost has fixed cost of 6000 and constant variable cost of 50.
a. If the industry is perfectly competitive, what will industry output be? What will be the equilibrium price? What profit will each firm earn?
b. Now suppose that there are five firms in the industry, and that they collude to set a price. What price will they set? What will be the output of each firm? What will be the profit of each firm? How much did total production go down because of the collusion? How much did the price go up?
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a If the industry is perfectly competitive then the equilibrium price will equal the minimum of the ...View the full answer
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Related Book For 
Managerial economics
ISBN: 978-1118041581
7th edition
Authors: william f. samuelson stephen g. marks
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