Quick Buck and Pushy Sales Produce and Sell Identical Products

question 2

Multiple Choice

Quick Buck and Pushy Sales produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. Suppose Quick Buck and Pushy Sales decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price. If Quick Buck cheats by reducing its price to $1 while Pushy Sales continues to comply with the collusive agreement, then Quick Buck's economic profit will be ________.

• A)$6,000
• B)$4,000
• C)$2,000
• D)$3,000

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Definitions:

Limited Capital

Restricted financial resources available to a business for investment and operational needs.

International Markets

Refers to the exchange of goods and services across national borders, involving the global marketplace where businesses operate in multiple countries.

Changing Needs

The concept that the requirements or preferences of individuals, markets, or environments evolve over time.

Multiproduct Shelving

Multiproduct shelving involves displaying various products in a retail space, designed to efficiently maximize visibility and accessibility of different items.