(Table: Demand for Solar Water Heaters) Look at the table Demand for Solar Water Heaters.The marginal cost of producing solar water heaters is zero, and only two firms, Rheem and Calefi, produce them.If they agree to produce only 50 water heaters, with each firm producing only 25 and if Rheem cheats on the agreement and produces 30 water heaters, what is the quantity effect?
A) $1,000
B) $4,500
C) $2,000
D) $9,000
Correct Answer:
Verified
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