Two companies (A and B)are duopolists that produce identical products.Demand for the products is given by the following demand function:

P = 10,000 - Q_A - Q_B

where Q_A and Q_B are the quantities sold by the respective firms and P is the selling price.

Total cost functions for the two companies are:

TC_A = 500,000 + 200Q_A + .5Q_A²
TC_B = 200,000 + 400Q_B + Q_B²

Assume that the firms form a cartel to maximize total industry profits (sum of Firm A and Firm B profits).Determine the optimum output and selling price for each firm.

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The Answer of Two companies (A and B)are duopolists that produce identical products.Demand for the products is given by the following demand function: P = 10,000 - Q_A - Q_B where Q_A and Q_B are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are: TC_A = 500,000 + 200Q_A + .5Q_A² TC_B = 200,000 + 400Q_B + Q_B² Assume that the firms form a cartel to maximize total industry profits (sum of Firm A and Firm B profits).Determine the optimum output and selling price for each firm.

Two Companies (A and B)are Duopolists That Produce Identical Products