Use the following to answer question:
-(Table: Demand for Crude Oil)Use Table: Demand for Crude Oil.Assume that the crude oil industry is a duopoly and the marginal cost of producing crude oil is zero.If the two firms collude to share the market equally,the price of crude oil will be _____,firm 1 will produce _____ barrels,firm 2 will produce _____ barrels,and each firm will earn revenue equal to _____.
A)$80;80;80;$6,400
B)$80;40;40;$3,200
C)$60;50;50;$3,000
D)$40;60;60;$2,400

Question

Use the following to answer question: 
-(Table: Demand for Crude Oil)Use Table: Demand for Crude Oil.Assume that the crude oil industry is a duopoly and the marginal cost of producing crude oil is zero.If the two firms collude to share the market equally,the price of crude oil will be _____,firm 1 will produce _____ barrels,firm 2 will produce _____ barrels,and each firm will earn revenue equal to _____.
A)$80;80;80;$6,400 
B)$80;40;40;$3,200 
C)$60;50;50;$3,000 
D)$40;60;60;$2,400

Quizplus · Accepted Answer

If the firms collude, they will act like a monopoly and maximize joint profits. The price of $80 is likely the monopoly price, and they will split the market equally, producing 40 barrels each, leading to a total revenue of $3,200 for each firm.

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