There Are Two Firms in the Blastopheme Industry

question 5

Multiple Choice

There are two firms in the blastopheme industry.The demand curve for blastophemes is given by p = 4,200 - 3q.Each firm has one manufacturing plant and each firm i has a cost function C(q_i) = q²i, where q_i is the output of firm i.The two firms form a cartel and arrange to split total industry profits equally.Under this cartel arrangement, they will maximize joint profits if

• A)they produce a total of 600 units, no matter which firm produces them.
• B)they produce a total of 466.67 units, no matter which firm produces them.
• C)and only if they each produce a total of 700 units.
• D)and only if each firm produces of 300 units in its plant.
• E)they shut down one of the two plants, having the other operate as a monopoly and splitting the profits.

---

Definitions:

Independent Accountants

Are professional auditors or accountants not employed by the company they are auditing, ensuring unbiased financial analysis and reporting.

London Stock Exchange

A leading global stock exchange located in London, United Kingdom, where stocks, bonds, and other securities are bought and sold.

SEC

The Securities and Exchange Commission, a U.S. federal agency responsible for regulating the securities industry, enforcing federal securities laws, and overseeing the stock and options exchanges.

European Commission

The executive body of the European Union responsible for proposing legislation, implementing decisions, upholding the EU treaties, and managing the day-to-day business of the EU.