Ann and Bruce each own a pizza store in Frostbite Falls, Minnesota. Demand for pizza is given by Q = 200 - 10P. Having the only two pizza stores in Frostbite Falls, they attempt to profitably split the market without violating the Sherman Antitrust Act. Each has the cost function C = 50 + 5Q. If Ann and Bruce behave as duopolists, each earns a profit of
A) $0.
B) $200.
C) $500.
D) $500
E) $562.50.
Correct Answer:
Verified
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