Use the Following to Answer Questions

question 132

Multiple Choice

Use the following to answer questions:
-(Table: Demand for Crude Oil) Look at the table Demand for Crude Oil. Assume that the crude oil industry is a duopoly and the marginal and fixed cost of producing crude oil equals zero. Suppose that the two firms are maximizing industry profit and splitting the profit evenly. If both firms decide to cheat and produce 10 more barrels each, firm 1's profit will be _____, and firm 2's profit will be _____.

• A) $3,200; $3,200
• B) $3,200; $3,000
• C) $3,000; $3,200
• D) $3,000; $3,000

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Definitions:

Negative Feedback

Feedback that inhibits change.

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