Suppose That Mystic Energy and E-Storm Are the Only Two

question 100

Multiple Choice

Suppose that Mystic Energy and E-Storm are the only two producers of hydrogen fuel cells. The market inverse demand curve for hydrogen fuel cells is P = 1,300 - 0.08Q, where Q is the number of fuels cells per month and P is the price per fuel cell. The marginal cost is constant at $500. Acting as a cartel, the owners of Mystic Energy and E-Storm agree to evenly split the market output. In this case, each firm produces ____.

• A) 5,000
• B) 3,000
• C) 2,500
• D) 1,500

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