Price (Dollars per gallon) 4.80 4.40 4.00 3.60 3.20 2.80 2.40 2.00 1.60 1.20 0.80 0.40 0 Quantity Demanded (Gallons of water) 0 35 70 105 140 175 210 245 280 315 350 385 420 Total Revenue (Dollars) 0 $154.00 $280.00 $378.00 $448.00 $490.00 $504.00 $490.00 $448.00 $378.00 $280.00 $154.00 0 Suppose Khalid and Sabrina form a cartel and behave as a monopolist. The profit-maximizing price is is 15 gallons. As part of their cartel agreement, Khalid and Sabrina agree to split production equally. Therefore, Khalid's profit is $1.50, and Sabrina's profit is $ After Khalid implements his new plan, the price of water Khalid's profit becomes $ Suppose that Khalid and Sabrina have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Khalid says to himself, "Sabrina and I aren't the best of friends anyway. If I increase my production to 35 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow." to $ $3.00 per gallon, and the total output and Sabrina's profit becomes $ per gallon. Given Sabrina and Khalid's production levels,

Price (Dollars per gallon) 4.80 4.40 4.00 3.60 3.20 2.80 2.40 2.00 1.60 1.20 0.80 0.40 0 Quantity Demanded (Gallons of water) 0 35 70 105 140 175 210 245 280 315 350 385 420 Total Revenue (Dollars) 0 $154.00 $280.00 $378.00 $448.00 $490.00 $504.00 $490.00 $448.00 $378.00 $280.00 $154.00 0 Suppose Khalid and Sabrina form a cartel and behave as a monopolist. The profit-maximizing price is is 15 gallons. As part of their cartel agreement, Khalid and Sabrina agree to split production equally. Therefore, Khalid's profit is $1.50, and Sabrina's profit is $ After Khalid implements his new plan, the price of water Khalid's profit becomes $ Suppose that Khalid and Sabrina have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Khalid says to himself, "Sabrina and I aren't the best of friends anyway. If I increase my production to 35 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow." to $ $3.00 per gallon, and the total output and Sabrina's profit becomes $ per gallon. Given Sabrina and Khalid's production levels,

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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