Duopolists a and B Face the Following Demand Curves: Q_A

question 29

Multiple Choice

Duopolists A and B face the following demand curves: Q_A = 150 - 5P_A + 4P_B and Q_B = 150 - 5P_B + 4P_A.If both firms have zero marginal cost and they form a cartel,what is the profit-maximizing price and quantity?

• A) P = 25, Q = 250.
• B) P = 40, Q = 100.
• C) P = 60, Q = 120.
• D) P = 80, Q = 80.
• E) P = 75, Q = 150.

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