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Two firms produce high quality aloha shirts: Hawaiian Wear (HW) and Island Wear (IW). Each firm has the same cost function given by TC = 20Q + Q^2. The market demand for aloha shirts is P = 200 - 2QT where QT is the total output of the two firms. Suppose the managers of the two firms decide to collude. If they formed a cartel, what would be the profit maximizing level of output?

a. 45

b. 22.5

c. 30

d. 36

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M964817

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