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.If Quick Buck and Pushy Sales decide to collude and work as a pure monopolist so that each firm will produce half the quantity demanded by the market,what will be the economic profit for Quick Buck?
A) $1,000
B) $1,500
C) $2,000
D) $3,000

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.If Quick Buck and Pushy Sales decide to collude and work as a pure monopolist so that each firm will produce half the quantity demanded by the market,what will be the economic profit for Quick Buck?
A) $1,000 
B) $1,500 
C) $2,000 
D) $3,000

Quizplus · Accepted Answer

Each firm produces 1,000 and earns $1.50 profit on each unit because average cost is zero.

Quick Buck and Pushy Sales Produce and Sell Identical Products