Two firms in an oligopolistic market, Firm A and Firm B, face the demand schedule shown.

If the two firms agree to act like a monopolist and split the market, they will each produce 150 units at a price of $50, creating a total of 300 units in the market, and the price will be $50. If Firm B decides to increase production by 50 units, which of the following statements is true?If Firm A also increases production by 50 units, price will decrease to $30.If Firm A continues producing 150 units, both firms' revenues will increase.If Firm A also increases production by 50 units, both firms' revenues will fall.

Question

Two firms in an oligopolistic market, Firm A and Firm B, face the demand schedule shown.

If the two firms agree to act like a monopolist and split the market, they will each produce 150 units at a price of $50, creating a total of 300 units in the market, and the price will be $50. If Firm B decides to increase production by 50 units, which of the following statements is true?If Firm A also increases production by 50 units, price will decrease to $30.If Firm A continues producing 150 units, both firms' revenues will increase.If Firm A also increases production by 50 units, both firms' revenues will fall.

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The Answer of Two firms in an oligopolistic market, Firm A and Firm B, face the demand schedule shown.

If the two firms agree to act like a monopolist and split the market, they will each produce 150 units at a price of $50, creating a total of 300 units in the market, and the price will be $50. If Firm B decides to increase production by 50 units, which of the following statements is true?If Firm A also increases production by 50 units, price will decrease to $30.If Firm A continues producing 150 units, both firms' revenues will increase.If Firm A also increases production by 50 units, both firms' revenues will fall.

Two Firms in an Oligopolistic Market, Firm a and Firm