Use the following to answer question:
-(Table: Demand for Crude Oil)Use Table: Demand for Crude Oil.Assume that the crude oil industry is a duopoly and the marginal and fixed cost of producing crude oil equals zero.Suppose that the two firms are maximizing industry profit and splitting the profit evenly.If both firms decide to cheat and produce 10 more barrels each,firm 1's profit will be _____,and firm 2's profit will be _____.
A)$3,200;$3,200
B)$3,200;$3,000
C)$3,000;$3,200
D)$3,000;$3,000

Question

Use the following to answer question: 
-(Table: Demand for Crude Oil)Use Table: Demand for Crude Oil.Assume that the crude oil industry is a duopoly and the marginal and fixed cost of producing crude oil equals zero.Suppose that the two firms are maximizing industry profit and splitting the profit evenly.If both firms decide to cheat and produce 10 more barrels each,firm 1's profit will be _____,and firm 2's profit will be _____.
A)$3,200;$3,200 
B)$3,200;$3,000 
C)$3,000;$3,200 
D)$3,000;$3,000

Quizplus · Accepted Answer

If both firms cheat and produce 10 more barrels each, they will both end up with the same reduced profit due to increased supply, leading to $3,000 each.

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