The Market Inverse Demand Curve for Thrust Bearings Is P

question 120

Essay

The market inverse demand curve for thrust bearings is P = 15 - 1.5Q, where Q is measured in hundreds of bearings per day and P is the price per bearing. The marginal cost is $3.
a. Suppose two firms, which are Bertrand competitors, produce identical thrust bearings for this market. What is the price of thrust bearings? How many thrust bearings are produced?
b. If the thrust bearing market were perfectly competitive, what would be the price and quantity produced?
c. If the thrust bearing market were monopolized, what would be the price and quantity produced?

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