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Thereareonlytwodrivewaypavingcompaniesinasmalltown,Asphalt,Inc.and BlacktopBros.The inverse demand curve for the services is, where quantity is measured in pave jobs per month and =1,60020price, in dollars per job. The
Thereareonlytwodrivewaypavingcompaniesinasmalltown,Asphalt,Inc.and BlacktopBros.The inverse demand curve for the services is, where quantity is measured in pave jobs per month and =1,60020price, in dollars per job. The firms have an identical marginal cost of $600 per driveway. If the two firms collude, splitting the work and profits evenly, how many driveways will each firm pave, and at what price? How much profit will each firm make?
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