Suppose a cartel is made of 2 firms and it's aggregate
market demand curve which faces the whole cartel is given by: Q :
5,00,000-10,000 P . The cartel
knows by some estimate that its profit-maximizing price is Rs. 40
per unit. The two firms face the following MC functions:
MCI : 7 + .OOIQI MC2 : 16.6 + .O002Q2
Q. (a) What is the MR of the cartel at the profit-maximizing
output? (b) What is the quantity allotted to each firm? Show all
calculations.
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