Suppose we have two identical firms A and B, selling identical products. They are the only firms in the market and compete by choosing prices at the same time. The Market demand curve is given by P=281-6Q. The only cost is a constant marginal cost of $14. Suppose both firms choose the collusion price and split the resulting market quantity equally. If Firm A lowers their price by $1 while Firm B continues to post the collusion price, what is the change in Firm A's revenues from the change in their price? Enter a number only, no $ sign. Include a negative sign if revenue decreases.

Suppose we have two identical firms A and B, selling identical products. They are the only firms in the market and compete by choosing prices at the same time. The Market demand curve is given by P=281-6Q. The only cost is a constant marginal cost of $14. Suppose both firms choose the collusion price and split the resulting market quantity equally. If Firm A lowers their price by $1 while Firm B continues to post the collusion price, what is the change in Firm A's revenues from the change in their price? Enter a number only, no $ sign. Include a negative sign if revenue decreases.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.4P

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