PRICE (Dollars per can)2.001.801.60Demand1.401.201.000.800.600.400.2000MC = ATCMR90 180 270 360 450 540 630 720 810 900QUANTITY (Cans of beer)Monopoly Outcome$0.80 per can. Given thisWhen they act as a profit-maximizing cartel, each company will produce180 cans and chargeinformation, each firm earns a daily profit of$144.00, so the daily total industry profit in the beer market is$288.00.Oligopolists often behave noncooperatively and act in their own self-interest even though this decreases total profit in the market. Again, assume thetwo companies form a cartel and decide to work together. Both firms initially agree to produce half the quantity that maximizes total industry profit.Now, suppose that Stargell decides to break the collusion and increase its output by 50%, while Schmidt continues to produce the amount set underthe collusive agreement.Stargell's deviation from the collusive agreement causes the price of a can of beer tonow $, while Schmidt's profit is now $Stargell increases its output beyond the collusive quantity.to $per can. Stargell's profit is. Therefore, you can conclude that total industry profitwhen

Step 1:When acting as a profit-maximizing cartel, each company will produce 180 cans and charge…

Answered: PRICE (Dollars per can) 2.00 1.80 1.60…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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