Consider two firms in a competitive market. The following table shows the marginal costs of the two firms. Marginal Cost ($) Output Firm 1 1 5 2 3 4 5 6 7 8 O a. 11.5; 12.0 O b. 10.5; 11.5 O c. 11.0; 11.5 O d. 12.0; 14.0 O e. 12.0; 12.5 6 Check 8 9 11 12 14 15 Firm 2 5.5 6.5 7.5 8.5 9.5 10.5 11.5 If the equilibrium price falls strictly between Answer01] and $[ Answer02 ], the two firms will produce a total of 12 units and the allocation of production will be efficient. 12.5

Consider two firms in a competitive market. The following table shows the marginal costs of the two firms. Marginal Cost ($) Output Firm 1 1 5 2 3 4 5 6 7 8 O a. 11.5; 12.0 O b. 10.5; 11.5 O c. 11.0; 11.5 O d. 12.0; 14.0 O e. 12.0; 12.5 6 Check 8 9 11 12 14 15 Firm 2 5.5 6.5 7.5 8.5 9.5 10.5 11.5 If the equilibrium price falls strictly between Answer01] and $[ Answer02 ], the two firms will produce a total of 12 units and the allocation of production will be efficient. 12.5

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.11P

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