Quick Buck and Pushy Sales Produce and Sell Identical Products

question 81

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.Quick Buck would then sell _____ units and Pushy Sales would sell ______ units.

• A) 0;3,000
• B) 1,500;1,500
• C) 2,000;1,000
• D) 3,000;0

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Definitions:

Joint Ventures

Business arrangements where two or more parties agree to pool their resources for accomplishing a specific task.

Core Capabilities

Fundamental skills, knowledge, and expertise that give an organization a competitive advantage in its field.

Global Licensing

A cross-border agreement that allows companies in different countries to use the properties (such as patents, trademarks, or technology) of another.

Turnkey Operation

A type of project that is constructed so that it can be sold or handed over to the buyer in a ready-to-use condition.