The Figure Given Below Represents Two Monopolists James and Jerry

question 27

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.What would be Jerry's profit maximizing price-output combination if the two monopolists do not cooperate?

• A)4 units at $9 each
• B)4 units at $3 each
• C)4 units at $6 each
• D)8 units at $6 each

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