Figure: Demand 3 Price $20 18 16 14- 12 10 - 8 6 4 2 0 I MC = AC Demand 2 4 6 8 10 12 14 16 18 20 Quantity If the two-firm oligopoly facing the market in this diagram is currently producing at the competitive output level an one of the firms reduces output by 4 units, the firm's profits would increase from $64 to $96 $0 to $48 $0 to $24 $32 to $48

Figure: Demand 3 Price $20 18 16 14- 12 10 - 8 6 4 2 0 I MC = AC Demand 2 4 6 8 10 12 14 16 18 20 Quantity If the two-firm oligopoly facing the market in this diagram is currently producing at the competitive output level an one of the firms reduces output by 4 units, the firm's profits would increase from $64 to $96 $0 to $48 $0 to $24 $32 to $48

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 4CQQ

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