Question

Industry demand is given by:

P=150 – 3Q

Cost curve for individual firm is given by: TC=5q_i+2q_i²

Assume there are 2 firms in the industry A and B. Costs are the same for both firms.

Find price, output and profit given that it is a centralized cartel.

Find prices and output for an individual firm and profit given that it is a decentralized cartel.       

Answer 1

fns;- îndus deman s aiven h cost curve ' individual วั Assume -^here are 2 Qirms in i A and B a emand, p ^ 150 -3 2 MR A 150 -60 MC

At cantralizas carte] !- 145 10g 2 150-3 (14-.5) 150 -43.5 p 스 106.5 Poi TR TC 2 2 2. 2. 2. 2 14-S ( 14-, 5)-5(14-๑) 210 2.51051.25 2

dr dh: 145-109,.. 322-0 dq 145-32 2 1 0 simila» c 145-32 2- 1 0 4s - 3(145-39 1 6 21 1430 43549 10O 100 21-99, 015 9191 1015 1,1015 91 2 - 11.15 Similart P50-32 F 150-3 (.15 1.5) p83. 2. n,: 83, l (11-15)-.5( 11-15)←2(11.15) ,6 2.2.17 similar p