Assume that demand for a product that is produced at zero marginal cost is reflected in the table below.
$$\begin{array} { | l | l | }
\hline \text { Quantity } & \text { Price } \
\hline 0 & \$ 36 \
\hline 200 & \$ 33 \
\hline 400 & \$ 30 \
\hline 600 & \$ 27 \
\hline 800 & \$ 24 \
\hline 1000 & \$ 21 \
\hline 1200 & \$ 18 \
\hline 1400 & \$ 15 \
\hline 1600 & \$ 12 \
\hline 1800 & \$ 9 \
\hline 2000 & \$ 6 \
\hline 2200 & \$ 3 \
\hline 2400 & \$ 0 \
\hline
\end{array}$$
a.What is the profit-maximizing level of production for a group of oligopolistic firms that operate as a cartel?
b.Assume that this market is characterized by a duopoly in which collusive agreements are illegal.What market price and quantity will be associated with a Nash equilibrium?

Question

Assume that demand for a product that is produced at zero marginal cost is reflected in the table below.
 $$\begin{array} { | l | l | } 
\hline \text { Quantity } & \text { Price } \
\hline 0 & \$ 36 \
\hline 200 & \$ 33 \
\hline 400 & \$ 30 \
\hline 600 & \$ 27 \
\hline 800 & \$ 24 \
\hline 1000 & \$ 21 \
\hline 1200 & \$ 18 \
\hline 1400 & \$ 15 \
\hline 1600 & \$ 12 \
\hline 1800 & \$ 9 \
\hline 2000 & \$ 6 \
\hline 2200 & \$ 3 \
\hline 2400 & \$ 0 \
\hline
\end{array}$$ 
a.What is the profit-maximizing level of production for a group of oligopolistic firms that operate as a cartel?
b.Assume that this market is characterized by a duopoly in which collusive agreements are illegal.What market price and quantity will be associated with a Nash equilibrium?

Quizplus · Accepted Answer

The Answer of Assume that demand for a product that is produced at zero marginal cost is reflected in the table below.
 $$\begin{array} { | l | l | } 
\hline \text { Quantity } & \text { Price } \
\hline 0 & \$ 36 \
\hline 200 & \$ 33 \
\hline 400 & \$ 30 \
\hline 600 & \$ 27 \
\hline 800 & \$ 24 \
\hline 1000 & \$ 21 \
\hline 1200 & \$ 18 \
\hline 1400 & \$ 15 \
\hline 1600 & \$ 12 \
\hline 1800 & \$ 9 \
\hline 2000 & \$ 6 \
\hline 2200 & \$ 3 \
\hline 2400 & \$ 0 \
\hline
\end{array}$$ 
a.What is the profit-maximizing level of production for a group of oligopolistic firms that operate as a cartel?
b.Assume that this market is characterized by a duopoly in which collusive agreements are illegal.What market price and quantity will be associated with a Nash equilibrium?

Assume That Demand for a Product That Is Produced at Zero