Table 17-11
Only two firms, ABC and XYZ, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost.
-Refer to Table 17-11. If ABC and XYZ operate to jointly maximize profits, then what is the price?
A)$14
B)$16
C)$18
D)$20

Question

Table 17-11
Only two firms, ABC and XYZ, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost. 
-Refer to Table 17-11. If ABC and XYZ operate to jointly maximize profits, then what is the price?
A)$14 
B)$16 
C)$18 
D)$20

Quizplus · Accepted Answer

To jointly maximize profits, ABC and XYZ would set a price where their combined marginal revenue equals their combined marginal cost. This typically results in a higher price than competitive pricing, which is often closer to the monopoly price. In this context, $18 is likely the price that maximizes joint profits.

Table 17-11 Only Two Firms, ABC and XYZ, Sell a Particular Product