Quick Buck and Pushy Sales Produce and Sell Identical Products

question 84

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:

Coaction Task

A type of group task where individuals work simultaneously and independently on the same task, often in each other's presence but without direct interaction.

Collective Task

A task designed to be completed by a group of individuals working together, requiring cooperative effort and coordination.

Wisdom of Crowd

The collective opinion of a group of individuals rather than that of a single expert, often leading to more accurate conclusions or predictions.

Averaging Judgments

The method of combining multiple opinions or estimates to produce a single, more reliable judgment, often used in decision-making processes.