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Question
On the planet Economus, the demand for Kryptonite is:QD = 24.08 - 0.06P P = 401
- 16
QD. There are four producers of Kryptonite on the planet who have formed a Kryptonite Cartel. The resulting marginal revenue function for the cartel is:MR(Q) = 401
- 33Q. The marginal costs for producing Kryptonite for the 4 different producers are:MC1 (q1) = q1,
MC2 (q2) = 1.5q2,
MC3 (q3) = 2q3,
MC4 (q4) = 2.5q4.
Determine the Cartel profit maximization output levels of each producer. If producer #2 cheats and produces 50% more than their collusive output level, determine their new revenue level.
Answer
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