Use the following to answer questions : $$\begin{array}{l}
\text { Table: Demand for Crude Oil }\
\begin{array} { c c c }
\text { Quantity } & \begin{array} { c }
\text { Price } \
\text { (\$/barrel) }
\end{array} & \begin{array} { c }
\text { Total } \
\text { Revenue (\$) }
\end{array} \
\hline 0 & \$ 160 & \$ 0 \
10 & 150 & 1500 \
20 & 140 & 2800 \
30 & 130 & 3900 \
40 & 120 & 4800 \
50 & 110 & 5500 \
60 & 100 & 6000 \
70 & 90 & 6300 \
80 & 80 & 6400 \
90 & 70 & 6300 \
100 & 60 & 6000 \
110 & 50 & 5500 \
120 & 40 & 4800 \
130 & 30 & 3900 \
140 & 20 & 2800 \
150 & 10 & 1500 \
160 & 0 & 0
\end{array}
\end{array}$$
-(Table: Demand for Crude Oil)Use Table: Demand for Crude Oil.Assume that the crude oil industry is a duopoly and the marginal and fixed costs of producing crude oil equal zero.Suppose that the two firms are maximizing industry profit and splitting the profit evenly.If both firms decide to cheat and produce 10 more barrels each,firm 1's profit will be _____,and firm 2's profit will be _____.
A) $3 200;$3 200
B) $3 200;$3 000
C) $3 000;$3 200
D) $3 000;$3 000

Question

Use the following to answer questions : $$\begin{array}{l}
\text { Table: Demand for Crude Oil }\
\begin{array} { c c c } 
\text { Quantity } & \begin{array} { c } 
\text { Price } \
\text { (\$/barrel) }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Revenue (\$) }
\end{array} \
\hline 0 & \$ 160 & \$ 0 \
10 & 150 & 1500 \
20 & 140 & 2800 \
30 & 130 & 3900 \
40 & 120 & 4800 \
50 & 110 & 5500 \
60 & 100 & 6000 \
70 & 90 & 6300 \
80 & 80 & 6400 \
90 & 70 & 6300 \
100 & 60 & 6000 \
110 & 50 & 5500 \
120 & 40 & 4800 \
130 & 30 & 3900 \
140 & 20 & 2800 \
150 & 10 & 1500 \
160 & 0 & 0
\end{array}
\end{array}$$
-(Table: Demand for Crude Oil)Use Table: Demand for Crude Oil.Assume that the crude oil industry is a duopoly and the marginal and fixed costs of producing crude oil equal zero.Suppose that the two firms are maximizing industry profit and splitting the profit evenly.If both firms decide to cheat and produce 10 more barrels each,firm 1's profit will be _____,and firm 2's profit will be _____.
A) $3 200;$3 200
B) $3 200;$3 000
C) $3 000;$3 200
D) $3 000;$3 000

Quizplus · Accepted Answer

If both firms produce 10 more barrels each, the total quantity becomes 80 barrels, with a price of $80 per barrel. Total revenue is $6400, split evenly, so each firm's profit is $3200. However, since both firms cheat, the new total quantity is 100 barrels, with a price of $60 per barrel. Total revenue is $6000, split evenly, so each firm's profit is $3000.

Use the Following to Answer Questions -(Table: Demand for Crude Oil)Use Table: Demand for Crude Oil