The accompanying table shows the demand schedule for, Ask an Expert

Economics

The accompanying table shows the demand schedule for Vitamin D. Suppose the marginal cost of producing vitamin D is zero

price of Vitamin D ($8,$7,$6,$5,$4,$3,$2,$1)

quantity of vitamin D (0,10,20,30,40,50,60,70)

a) Suppose that company A is the only producer of vitamin D and act as a monopolist.Suppose the company produces 40 units of vitamin D at $4/unit. if the company decides to produce 10 units more, what is the price effect? what is the quantity effect? would the company then have an incentive to produce 10 more units?

b)Now suppose that company B enters the market,and the market is now duopoly. the companies decide to produce 40 units in total.Company A cannot be punished for deviating from the agreement with company B.if company A decided to produce 10 units more,what is the price effect?what is the quantity effect?should company A have incentive to produce 10 additional units?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91949602

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