Use the following to answer questions below :
-Refer to the graph of market demand and marginal revenue. Two firms have formed a centralized cartel in order to maximize profit on the market. Their marginal cost curves are given below:
MC1 = 5Q1 and MC2 = 10Q2
In order to maximize profit, the firms should produce
A) Q1 = 4, Q2 = 2, and charge P = 50.
B) Q1 = 8, Q2 = 0, and charge P = 40.
C) Q1 = 3, Q2 = 1, and charge P = 60.
D) None of the above is correct.
Correct Answer:
Verified
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