The Market Inverse Demand Curve Is P = 90 -

question 57

Multiple Choice

The market inverse demand curve is P = 90 - Q, where Q is the total market output consisting of Firm 1's output, q₁, and Firm 2's output, q₂. Both firms have a constant marginal cost of $10. If Firm 1 selects its output level first, how much output does each firm produce?

• A) q₁ = 40; q₂ = 20
• B) q₁ = 30; q₂ = 15
• C) q₁ = 18; q₂ = 18
• D) q₁ = 14; q₂ = 21

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