final_bl5 - The Colorado College Department of Economics...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1 The Colorado College Department of Economics and Business Block 5: Principles of Microeconomics Block 5 Econ 151 Final. End Block celebration of knowledge. Do all 4 questions. Time: 2 hours and 30 minutes. Please be clear and precise with the answers. Write and sign you follow the CC Honor Code. Turn in question paper along with answer booklet. 1) (a) The following information describes the market demand schedule for a unique type of apple. This type of apple can only be produced by two firms because they own the land on which these unique trees spontaneously grow. As a result, the marginal and total cost of production is zero for these duopolists, causing total revenue to equal profit. Price per bushel Quantity (in bushels) Total Revenue 12 0 11 5 10 10 9 15 8 20 7 25 6 30 5 35 4 40 3 45 2 50 1 55 0 60 (i) Calculate the total revenue corresponding to each price-quantity level. (2 points) (ii) If the duoplolists were forced to charge a perfectly competitive price, what price and quantity would be generated by this market? Explain. (2 points) (iii) If these two firms colluded and formed a cartel, what price and quantity would be generated by the cartel? What is the level of profit for the cartel? If they decide to share the quantity produced and profit equally, what is the level of profit and quantity for each firm? (2 points) (iv) If one firm cheats and produces one additional increment (five units) of production, what is the level of profit generated by each firm? (2 points)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/19/2008 for the course EC 151 taught by Professor Ghosh during the Spring '08 term at Colorado College.

Page1 / 3

final_bl5 - The Colorado College Department of Economics...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online