Exhibit 11-2 In Exhibit 11-2, total earnings at equilibrium equal

Name: Exhibit 11-2 In Exhibit 11-2, total earnings at equilibrium equal
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Question

Exhibit 11-2  In Exhibit 11-2, total earnings at equilibrium equal

Quizplus · Accepted Answer

At equilibrium, both firms will produce the same quantity where marginal cost equals marginal revenue. This occurs at a quantity of 4. At a price of $40, each firm will earn $160 in total earnings ($40 x 4 units). Therefore, total earnings at equilibrium equal $320 ($160 x 2 firms).

Exhibit 11-2 in Exhibit 11-2, Total Earnings at Equilibrium