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If an Industry Consisting of Two Firms Produces a Total

question 161

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If an industry consisting of two firms produces a total of 12 units, the market price is $10. If 13 units are produced, the price falls to $9. Suppose the two firms form a cartel and agree to produce 6 units each. If one firm cheats and produces 7 units, the cheating firm's revenue rises by _____ and the noncheating firm's revenue falls by _____.


Definitions:

Stanford-Binet Intelligence Scale

An individually administered intelligence test that was revised from the Binet-Simon Scale, used to assess human intelligence.

Mental Age

A measure of an individual's mental aptitude based on the average age at which normal individuals achieve a certain level of performance.

Chronological Age

The age of an individual as measured from their birth to the present date, typically expressed in years.

Symmetrical Bell-Shaped Curve

A graphical representation of a normal distribution, indicating that most occurrences take place around the mean and fewer occur as one moves away from the mean.

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