Question

The following table shows your neighborhood’s demand for cell phone coverage. Assume that only two firms (Sprint and Verizon) sell in this market, that each firm offers the same quality of service, and that each firm’s marginal cost is constant and equal to $0 because of excess capacity.

Price per plan (P)	Number of customers (Q)	Total revenue per month (TR)
$0	10000	$0
$1	9000	$900
$2	8000	$1,600
$3	7000	$2,100
$4	6000	$2,400
$5	5000	$2,500
$6	4000	$2,400
$7	3000	$2,100
$8	2000	$1,600
$9	1000	$900
$10	0	$0

3rd attempt

Part 1

If Sprint and Verizon each agreed to supply half of the quantity a monopolist would supply, the agreement would specify that each company supplies ______ plans.

Answer 1

When the two producers collude and act as a monopolist,they will produce where the total revenue is maximum.

At the maximum total revenue of 2500, Q=5000

Each company will supply half = 5000/2 = 2500 plans