MODULE IV : MARKET STRUCTURES Case Study Assume that two identical firms in a purely oligopolistic industry selling a homogenous product agree to share the maket equally. The total market demand function for the commodity is Qd = 240 - 10P. The cost schedules of the firms are given in the following table: q1 40 50 60 80 q2 50 70 100 SMC1 (Rs.) 8 10 12 16 SMC1 (Rs.) 4 6 9 SAC1 (Rs.) 13 12.3 12 13 SACT (Rs.) 7 6 7 Question 1: Profits for this firm will be: a. Rs. 420 b. Rs. 130 (wrong) C. RS. 350 d. Rs. 450 Question 2: When q1 = 40, What will be MR1? a. 2 b. 8 C. 5 d. 4 Question 3: When q1 = 40, what will be the profit maximising output for the first firm? a. 30 b. 60 C. 40 d. 20 Question 4: When q1 = 50, what will be MR1? a. 7 b. 2 C. 4 d. 3 Question 5: When q1 = 60, what will be MR1? a. 0 b. 2 C. 4 d. 6 Question 6: When q1 = 80, what will be MR1? 1. 7 b. -4 1 5 d. -8 Question 7: When q2 = 100, then MR2 will be a. 16 b. 32 c. -32 d. .16 Question 8: When q2 = 50, price at this level of output will be a. 12 b. 14 C. 24 d. 32 Question 9: When q2 = 50, then MR2 will be a. 2 b. 4 C. 5 d. 6 Question 10: When q2 = 70, then MR2 will be a. 4 b.-9 C. d. -5