Table 17-4 Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Price (Dollars per unit) Quantity Demanded Total Revenue (Units) (Dollars) 14 0 0 13 5 65 12 10 120 11 15 165 10 20 200 9 25 225 8 30 240 7 35 245 6 40 240 5 45 225 4 50 200 3 55 165 2 60 120 1 65 65 0 70 0 Questions: A) How much less do each of these firms earn in the Nash equilibrium than if they jointly maximize profits?

Table 17-4 Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Price (Dollars per unit) Quantity Demanded Total Revenue (Units) (Dollars) 14 0 0 13 5 65 12 10 120 11 15 165 10 20 200 9 25 225 8 30 240 7 35 245 6 40 240 5 45 225 4 50 200 3 55 165 2 60 120 1 65 65 0 70 0 Questions: A) How much less do each of these firms earn in the Nash equilibrium than if they jointly maximize profits?

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 14CQ

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Table 17-4 Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Price (Dollars per unit) 14 13 12 11 11 10 9 8 7 7 6 5 5 A 4 3 2 2 1 0 Quantity Demanded Total Revenue (Dollars) 0 65 120 QUESTION 9 (Units) 0 5 10 15 20 20 25 30 35 40 45 50 55 60 65 70 165 200 200 225 240 245 240 225 200 165 120 65 0 Refer to Table 17-4. If ABC and MNO operate to jointly maximize profits and agree to share the profit equally, then how much profit will each of them earn? O a. $125.00 O b. $62.50 O c. $225.00 O d. $24.00
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