Quick Buck and Pushy Sales Produce and Sell Identical Products

question 40

Multiple Choice

Quick Buck and Pushy Sales produce and sell identical products and face zero marginal and average cost.Below is the market demand and marginal revenue curves for the product.
Refer to the figure above.Quick Buck and Pushy Sales have agreed to each produce half the profit-maximizing monopolist quantity,set the monopoly price and split the profits evenly.Suppose Quick Buck cheats on Pushy Sales and reduces its price to $1.00 each while Pushy Sales continues to comply with the collusive agreement.What will be the economic profit for Quick Buck?

• A)$6,000
• B)$1,500
• C)$2,000
• D)$3,000

Understand the concept of rent and the factors determining it.

Comprehend how changes in productivity directly affect input demand curves.

Understand the optimal combination of inputs for production efficiency.

Know the profit-maximizing condition for perfectly competitive firms in terms of marginal product per dollar spent.

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