The figure given below represents the output choices of each of the two oligopolists, given the choices of its competitor.QA and QB are the quantities of output produced by Producer A and Producer B.The marginal cost of production is zero for both producers.

-Refer to Figure .If the two producers agree to act as a single monopoly firm, what will be the total output produced in the economy?
A)10 units
B)6 units
C)12 units
D)3 units

Question

The figure given below represents the output choices of each of the two oligopolists, given the choices of its competitor.QA and QB are the quantities of output produced by Producer A and Producer B.The marginal cost of production is zero for both producers.

-Refer to Figure .If the two producers agree to act as a single monopoly firm, what will be the total output produced in the economy?

-Refer to Figure .If the two producers agree to act as a single monopoly firm, what will be the total output produced in the economy?
A)10 units 
B)6 units 
C)12 units 
D)3 units

Quizplus · Accepted Answer

When two producers agree to act as a single monopoly, they will produce the quantity where marginal cost equals marginal revenue to maximize profit, which is typically less than the competitive output. In this case, it is 6 units.

The Figure Given Below Represents the Output Choices of Each