Scenario: Two identical firms make up an industry (duopoly) in which the market demand curve is represented by Qd=5,000-4P, and the marginal cost (MC) is constant and equal to $650. Suppose the two firms decide to cooperate and collude; resulting in the same amount of production for each firm. What is the profit-maximizing price and output for the industry?

Answer rating: 100% (QA)

To find the profitmaximizing price and output for the industry when two identical firms collude we f... View the full answer