Suppose That Grinch and Grubb Go into the Wine Business

question 20

Multiple Choice

suppose that Grinch and Grubb go into the wine business in a small country where wine is difficult to grow.The demand for wine is given by p = $480 - .2Q, where p is the price and Q is the total quantity sold.The industry consists of just the two Cournot duopolists, Grinch and Grubb.Imports are prohibited.Grinch has constant marginal costs of $6 and Grubb has marginal costs of $45.How much Grinch's output in equilibrium?

• A)675
• B)1,350
• C)337.50
• D)1,012.50
• E)2,025