Suppose each firm in an industry is characterized by the cost function C(Q) = 2Q + 500. If the entire industry demand for the product is 657 units. The average per unit cost savings having one firm produce all of the units rather than two firms split production is ____?

1. Hint: Write your answer to two decimal places.

10 points   

QUESTION 5

2. In a perfectly competitive market, industry demand is: P = 850 – 3.7Q, and industry supply is: P = 250 + 4Q (Supply is the sum of the marginal cost curves of the firms in the industry). If instead all of the firms behave as a cartel, prices will increase by ____.

   Hint: Round your answer to two decimal places

Answer rating: 100% (QA)

To find the average per unit cost savings when one firm produces all the units instead of two firms splitting production we need to compare the total ... View the full answer