Quick Buck and Pushy Sales Produce and Sell Identical Products

question 80

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 and Pushy Sales matches the price cut.Consumers are evenly split between the two firms.What will be the economic profit for Quick Buck?

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

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Definitions:

Variance

A statistical measure that represents the degree to which a set of numbers are spread out, calculated as the average of the squared differences from the Mean.

Sample Size

The number of observations or units that make up a statistical sample.

Genet

Edmond-Charles Genêt, a French diplomat who caused a controversy in 1793 by violating diplomatic protocol in the United States during the French Revolutionary Wars.

Neutrality Pact

An agreement between states to remain neutral, especially in a conflict, neither supporting nor opposing any side involved.