Assume that demand for a product that is produced at zero marginal cost is reflected in the
Question:
Assume that demand for a product that is produced at zero marginal cost is reflected in the table below.
Quantity | Price
0 | 36
200 | 33
400 | 30
600 | 27
800 | 24
1000 | 21
1200 | 18
1400 | 15
1600 | 12
1800 | 9
2000 | 6
2200 | 3
2400 | 0
a. What is the profit-maximizing level of production for a group of oligopolistic firms that operate as a cartel?
b. Assume that this market is characterized by a duopoly in which collusive agreements are illegal. What market price and quantity will be associated with a Nash equilibrium?
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman