Quick Buck and Pushy Sales Produce and Sell Identical Products

question 94

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

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Definitions:

Stained Cells

Cells that have been treated with specific dyes to highlight particular components under a microscope.

Posterior Lobe

The back part of an organ or gland, such as the posterior lobe of the pituitary gland in the brain.

Homeostasis

The process by which living organisms regulate their internal environment to maintain stable, life-supporting conditions.

Pars Intermedia

The intermediate lobe of the pituitary gland, involved in the production of melanocyte-stimulating hormone (MSH).