Consider two firms competing to sell a homogeneous product by setting price.The inverse demand curve is given by P = 15 − Q.Firm 1 has MC₁(Q₁)= 1 and firm 2 has MC₂(Q₂)= 1.05.Based on this information,we can conclude that the market price will be: A) $1 and each firm will produce 7 units. B) $1.05 and each firm will produce 6.975 units. C) $1.04 and firm 1 will produce 13.96 units and firm 2 will produce 0 units. D) $1 and firm 1 will produce 14 units and firm 2 will produce 0 units.

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The Answer of Consider two firms competing to sell a homogeneous product by setting price.The inverse demand curve is given by P = 15 − Q.Firm 1 has MC₁(Q₁)= 1 and firm 2 has MC₂(Q₂)= 1.05.Based on this information,we can conclude that the market price will be: A) $1 and each firm will produce 7 units. B) $1.05 and each firm will produce 6.975 units. C) $1.04 and firm 1 will produce 13.96 units and firm 2 will produce 0 units. D) $1 and firm 1 will produce 14 units and firm 2 will produce 0 units.

Consider Two Firms Competing to Sell a Homogeneous Product by Setting