=+*14. A lemon-growing cartel consists of four orchards. Their total cost functions are TC1 = 20 +
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=+*14. A lemon-growing cartel consists of four orchards.
Their total cost functions are TC1 = 20 + 5Q1 2
TC2 = 25 + 3Q2 2
TC3 = 15 + 4Q3 2
TC4 = 20 + 6Q4 2
TC is in hundreds of dollars, and Q is in cartons per month picked and shipped.
a. Tabulate total, average, and marginal costs for each firm for output levels between 1 and 5 cartons per month (i.e., for 1, 2, 3, 4, and 5 cartons).
b. If the cartel decided to ship 10 cartons per month and set a price of $25 per carton, how should output be allocated among the firms?
c. At this shipping level, which firm has the most incentive to cheat?
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Related Book For
Microeconomics
ISBN: 9781292081977
8th Global Edition
Authors: Robert S. Pindyck, Daniel L. Rubinfeld
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