The Figure Given Below Represents Two Monopolists James and Jerry

question 20

Multiple Choice

The figure given below represents two monopolists James and Jerry.James produces Good A using the input Good B which is produced by Jerry and has no other variable costs.James is the only consumer of Good B, and the marginal cost incurred by Jerry to produce Good B is zero.DA and DB represent the demand curves for Good A and Good B respectively.MRA and MRB represent the marginal revenue received from Good A and Good B respectively.It takes one unit of A to produce a unit of B.


-Refer to Figure .Which of the following observations is true, assuming the two monopolists do not merge?

• A)The price charged by James for his output is equal to that charged by Jerry.
• B)The profit earned by James is almost double of that earned by Jerry.
• C)The marginal cost of producing Good A is zero.
• D)The marginal revenue curve for Good A is the demand curve for Good B.

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