The accompanying table shows the demand schedule for vitamin D. Suppose that the

Question

The accompanying table shows the demand schedule for vitamin D. Suppose that the marginal cost of producing vitamin D is zero. How much would each firm (Firm 1 and Firm 2) in a colluding duopoly produce? A) 20 8) 10 C) 35 D) 17.5 9. Price of vitamin D (per ton) Q demanded (tons) TR 0 0 $8 35 10 60 15 75 20 25 30 35 80 75 60 4 35 10. If Firm 1 in the previous question doubles their agreed upon output, then Firm 1 will and Firm 2 will have total revenue equal to have total revenue equal to A) Firm 1 TR-40; Firm 2 TR-20 B) Firm 1 TR- 40; Firm 2 TR-40 C) Firm 1 TR- 30; Firm 2 TR-30 D) Firm 1 TR 60; Firm 2 TR-0 11. If macaroni and cheese is an inferior good, then an in consumer's income will cause the demand curve for macaroni and cheese to shift to the left and the income elasticity of demand is A) decrease; positive B) increase; negative C) increase; positive D) decrease; negative

Explanation / Answer

9) Option A is correct. Each firm will produce 20 units. Because at this output total revenue is maximum.

10) Option A is correct.

11) Option B is correct. Increase, Negative

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