The table below is the demand faced by the Tienshan Company, a monopolist that enjoys zero variable cost in its production of fine mineral water. $\begin{array} { c c }
\hline \text { Price } & \text { Quantity Demanded } \
\hline \$ 2.50 & 60 \
2.25 & 70 \
2.00 & 80 \
1.75 & 90 \
1.50 & 100 \
1.25 & 110 \
1.00 & 120 \
0.75 & 130 \
0.50 & 140 \
0.25 & 150 \
0 & 160 \
\hline
\end{array}$ a) What is the price Tienshan will charge and what quantity of output will it produce?
Suppose that Endless Journey Inc., which also has zero variable costs, enters this industry and assumes that Tienshan will continue to produce its current output.
b) What output will Endless Journey choose to produce and what will be the new market price, given both firms' output?

Question

The table below is the demand faced by the Tienshan Company, a monopolist that enjoys zero variable cost in its production of fine mineral water. $\begin{array} { c c } 
\hline \text { Price } & \text { Quantity Demanded } \
\hline \$ 2.50 & 60 \
2.25 & 70 \
2.00 & 80 \
1.75 & 90 \
1.50 & 100 \
1.25 & 110 \
1.00 & 120 \
0.75 & 130 \
0.50 & 140 \
0.25 & 150 \
0 & 160 \
\hline
\end{array}$ a) What is the price Tienshan will charge and what quantity of output will it produce?
Suppose that Endless Journey Inc., which also has zero variable costs, enters this industry and assumes that Tienshan will continue to produce its current output.
b) What output will Endless Journey choose to produce and what will be the new market price, given both firms' output?

Quizplus · Accepted Answer

The Answer of The table below is the demand faced by the Tienshan Company, a monopolist that enjoys zero variable cost in its production of fine mineral water. $\begin{array} { c c } 
\hline \text { Price } & \text { Quantity Demanded } \
\hline \$ 2.50 & 60 \
2.25 & 70 \
2.00 & 80 \
1.75 & 90 \
1.50 & 100 \
1.25 & 110 \
1.00 & 120 \
0.75 & 130 \
0.50 & 140 \
0.25 & 150 \
0 & 160 \
\hline
\end{array}$ a) What is the price Tienshan will charge and what quantity of output will it produce?
Suppose that Endless Journey Inc., which also has zero variable costs, enters this industry and assumes that Tienshan will continue to produce its current output.
b) What output will Endless Journey choose to produce and what will be the new market price, given both firms' output?

The Table Below Is the Demand Faced by the Tienshan