Suppose Acme and Mega Produce and Sell Identical Products and Face

question 15

Multiple Choice

Suppose Acme and Mega produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. Suppose Acme and Mega 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 Mega cheats on the agreement by reducing its price to $1 and Acme matches the price cut, then if consumers are evenly split between the two firms, Acme's economic profit will be ______.

• A)$75
• B)$100
• C)$150
• D)$200

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Definitions:

Popliteal Vein

A blood vessel situated at the back of the knee which transports blood from the lower leg to the femoral vein.

External Iliac Vein

A large vein that carries deoxygenated blood from the lower limbs to the common iliac vein.

Femoral Vein

A large vein in the thigh that carries deoxygenated blood from the lower limb back to the heart.

Hepatic Portal Vein

A large vein that carries nutrient-rich blood from the digestive organs to the liver for processing.