Use the Following to Answer Questions

question 245

Multiple Choice

Use the following to answer questions :
Scenario: Two Identical Firms
Two identical firms make up an industry in which the market demand curve is represented by Q = 5 000 - 4P,where Q is the quantity demanded and P is the price per unit.The marginal cost of producing the good in this industry is constant and equal to $650.Fixed cost is zero.
-(Scenario: Two Identical Firms) Use Scenario: Two Identical Firms.Suppose the two firms decide to cooperate and collude,resulting in the same amount of production for each firm.What is the profit-maximizing price and output for the industry?

• A) P = $400,Q = 5 000
• B) P = $950,Q = 1 200
• C) P = $600,Q = 1 500
• D) P = $300,Q = 2 000

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Definitions:

Critical Value

A limit in hypothesis testing that sets the dividing line between the area where the null hypothesis is accepted and the area where it is rejected.

Hypotheses

Proposed explanations or predictions that are based on limited evidence as a starting point for further investigation.

Alpha

Typically refers to the level of significance in statistical hypothesis testing, representing the likelihood of rejecting a true null hypothesis.

T-statistic

A type of statistic used in hypothesis testing, calculated to determine the significance of certain variables or differences between means.