Table 17-9
Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost.

-Refer to Table 17-9.If Acme and Pinnacle operate to jointly maximize profits,then what quantity is sold?
A) 800
B) 700
C) 600
D) 500

Question

Table 17-9
Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost.
 
-Refer to Table 17-9.If Acme and Pinnacle operate to jointly maximize profits,then what quantity is sold?
A) 800 
B) 700 
C) 600 
D) 500

Quizplus · Accepted Answer

The quantity at which marginal revenue equals marginal cost is calculated for both firms. This gives us the quantities of 400 for Acme and 200 for Pinnacle. Thus, the total quantity sold is 600. Since both firms have the same marginal cost, they will split the market evenly, and each will produce 300 units. Therefore, the jointly profit-maximizing quantity is 600.

Table 17-9 Only Two Firms, Acme and Pinnacle, Sell a Particular Product