Assume that the firms form a cartel to maximize total, Ask an Expert

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Q. Two companies (A as well as B) are duopolists that produce identical products. Demand as well as for the products is given by the following demand as well as function:

QB QA P = 10,000
where QA as well as QB are the quantities sold by the respective firms as well as P is the selling cost.
Total cost functions for the two companies are:
TCA = 500,000 + 200QA + .5QA2
TCB = 200,000 + 400QB + QB2
Assume that the firms form a cartel to maximize total industry profits (sum of firm A as well as firm B profits). Determine the optimum output as well as selling cost for each firm.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9158033

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