There are two firms in the blastopheme industry. The demand curve for blastophemes is given by p=2100-3q. Each firm has one manufacturing plant and each firm i has a cost function C(qi)=qi2 , where qi is the output of firm i. The two firms from a cartel and arrange to split total industry profits equally. Under this cartel arrangement, what will they do if they want to maximize joint profits?.

There are two firms in the blastopheme industry. The demand curve for blastophemes is given by p=2100-3q. Each firm has one manufacturing plant and each firm i has a cost function C(qi)=qi2 , where qi is the output of firm i. The two firms from a cartel and arrange to split total industry profits equally. Under this cartel arrangement, what will they do if they want to maximize joint profits?.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter11: Monopolistic Competition, Oligopoly, And Game Theory

Section: Chapter Questions

Problem 4WNG

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