Quick Buck and Pushy Sales produce and sell identical products and face zero marginal and average cost.Below is the market demand and marginal revenue curves for the product.
Refer to the figure above.Quick Buck and Pushy Sales have agreed to each produce half the profit-maximizing monopolist quantity,set the monopoly price and split the profits evenly.Suppose Quick Buck cheats on Pushy Sales and reduces its price to $1.00 each while Pushy Sales continues to comply with the collusive agreement.Quick Buck would then sell _____ units and Pushy Sales would sell ______ units.
A)0;3,000
B)1,500;1,500
C)2,000;1,000
D)3,000;0

Question

Quick Buck and Pushy Sales produce and sell identical products and face zero marginal and average cost.Below is the market demand and marginal revenue curves for the product. 
Refer to the figure above.Quick Buck and Pushy Sales have agreed to each produce half the profit-maximizing monopolist quantity,set the monopoly price and split the profits evenly.Suppose Quick Buck cheats on Pushy Sales and reduces its price to $1.00 each while Pushy Sales continues to comply with the collusive agreement.Quick Buck would then sell _____ units and Pushy Sales would sell ______ units.
A)0;3,000 
B)1,500;1,500 
C)2,000;1,000 
D)3,000;0

Quizplus · Accepted Answer

When price is $1.00,3,000 units are sold.There are no consumers left willing to pay $1.50.

Quick Buck and Pushy Sales Produce and Sell Identical Products