Use the following table (which shows the demand curve for a given market) to answer the questions

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Use the following table (which shows the demand curve for a given market) to answer the questions below:

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a. What price and output would a monopoly have if it has a constant average and marginal cost of $4 per unit?

b. If there are two firms (with AC = MC = $4), what price and output will they set if they collude successfully?

c. Given that the price in

(b) has been set, how will it pay one of the firms to cut its price?

d. If both firms continue to cut prices, what price will emerge?

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Economics Barrons Business Review Series

ISBN: 9781438008776

6th Edition

Authors: Walter J. Wessels

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Question Posted: Feb 18, 2024 04:01 AM

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Use the following table (which shows the demand curve for a given market) to answer the questions

Question:

Quantity Demanded Demand Price 1 $10 2 9 3 8 4 7 5 6 6 LO 5 7 4

Step by Step Answer:

a MR MC 4 at Q 4 and P 7 b Same as a Output has to be distributed between them Most likel...View the full answer

Economics Barrons Business Review Series

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