Suppose that Firm A and B are producers of industrial robots. Suppose that the marginal cost of making a robot is constant at $1 per unit and there is no fixed cost. The demand for the robot is described by the following schedule. (6 points)

Price Quantity

$8 0

$7 6

$6 7

$5 8

$4 9

$3 10

$2 11

$1 12

a. If the market for the robots was perfectly competitive, what would be the market equilibrium price and quantity?

b. If two firms formed a cartel and charged a single price, what would be the total profits, total quantity, and market price?

c. If two firms formed a cartel and perfectly discriminated, what would be the total profits and total quantity.

Answer rating: 100% (QA)

Given MC 1 a Market is perfectly competitive We know in perfect competition E... View the full answer