Assume That Demand for a Product That Is Produced at Zero

question 7

Essay

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?

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Definitions:

Tube-fed

The delivery of nutrition directly to the stomach or intestine via a tube, used when an individual is unable to eat by mouth.

Botulism Immune Globulin

An intravenous medication used to treat infant botulism, containing antibodies against the toxin produced by Clostridium botulinum.

Total Parenteral Nutrition

A method of feeding that bypasses the gastrointestinal tract, delivering nutrients directly into the bloodstream.

Botulism

A rare but serious illness caused by botulinum toxin, which can lead to paralysis and is often foodborne.