(Free s10 $10 ate $5 s5 $1 $1 10 100 500 S) The graphs above show the marginal c
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(Free s10 $10 ate $5 s5 $1 $1 10 100 500 S) The graphs above show the marginal cost of an individual price-taking firm 1000 industry supply and demand curves. This firm can join a cartel. Answe on the graph. the following questions based a. Determine the quantity the individual firm produces in a competitive equilibrium. Suppose this firm agrees to a quota of 2 units and the joint action of the entire cartel pushes the price to $5.00 per unit. Determine the producer surplus the firm earns under that price and quota Determine the quantity the firm will want to produce if it cheats on the cartel (you can assume the price is unaffected) b. c.Explanation / Answer
In competitive equilibrium the firm will produce 5 units
Produce surplus =1/2 multiplied by 5=2.5
In that case firm will still produce 2
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