Duopolists a and B Face the Following Demand Curves: Q_A

question 22

Multiple Choice

Duopolists A and B face the following demand curves: Q_A = 120 - 2P_A + P_B and Q_B = 120 - 2P_B + P_A.If both firms have zero marginal cost and they form a cartel,what is the profit-maximizing price and quantity?

• A) P = 30, Q = 180.
• B) P = 40, Q = 160.
• C) P = 60, Q = 120.
• D) P = 80, Q = 80.
• E) P = 75, Q = 90.

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Definitions:

Supporting Evidence

Information, data, or facts that underpin and reinforce a theory, hypothesis, or belief.

Unconditioned Stimuli

In classical conditioning, stimuli that naturally and automatically trigger a response without prior learning.

Overdoses

Excessive and dangerous doses of substances, leading to toxic reactions and sometimes death; commonly associated with drugs and medication.

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Drug tolerance occurs when an individual's physiological reaction to a specific drug diminishes with repeated use, leading to the need for higher doses to achieve the same effect.