The following are marginal cost curves for selling chicken in a Mom & Pop (MC_M) store and in a Big-Box retailer (MC_B). MC_M = 2 + 2Q_M MC_B = 4 + Q_B If there are 6 total chickens being sold, how many chickens does each firm sell? A) Mom & Pop: 0; Big-Box: 6 B) Mom & Pop: 1; Big-Box: 5 C) Mom & Pop: 2; Big-Box: 4 D) Mom & Pop: 3; Big-Box: 3

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Quizplus · Accepted Answer

The total number of chickens sold is 6, so Q_M + Q_B = 6. We can use this to solve for Q_M in terms of Q_B: Q_M = 6 - Q_B. Substituting this into the marginal cost curves, we get:MC_M = 2 + 2(6 - Q_B) = 14 - 2Q_BMC_B = 4 + Q_BSetting these two marginal cost curves equal to each other, we get:14 - 2Q_B = 4 + Q_B3Q_B = 10Q_B = 10/3Substituting this back into Q_M = 6 - Q_B, we get:Q_M = 6 - 10/3 = 8/3Therefore, Mom & Pop sells 8/3 chickens and Big-Box sells 10/3 chickens.

The Following Are Marginal Cost Curves for Selling Chicken in a Mom