Now suppose one big firm comes and buys out all of the, Ask an Expert

Economics

The market for qbits is initially competitive and the market demand is: P ? 400 ? 0.4QD . The

combined marginal costs of the firms in the qbit industry are: MC ? 50 ? 0.6Q .

a. Draw the demand, and marginal cost curves. Calculate and show how much these firms will sell and what they will charge.

b. Now a bunch of other firms buy out all of the qbit producers and create a cartel (their combined MC doesn't change). How much will the cartel produce? What price will they charge? (Draw any necessary new curves on your graph above).

c. Is there any DWL associated with the cartel? If so, how much?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9445035

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