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Suppose that Mystic Energy and E-Storm are the only two producers of hydrogen fuel cells. The market inverse demand curve for hydrogen fuel cells is P = 1,300 – 0.08Q, where Q is the number of fuels cells per month and P is the price per fuel cell. The marginal cost is constant at $500. Acting as a cartel, the owners of Mystic Energy and E-Storm agree to evenly split the market output. In this case, each firm produces ____.

Respuesta :

Answer:

The amount each firm produces would be 2,500 units per month

Explanation:

According to the given data we have the following:

demand curve for hydrogen fuel cells= P = 1,300 – 0.08Q

marginal cost=$500

Therefore, in order to calculate the amount each firm produces we would have to use the following formula:

MR = MC

This gives 1300 - 0.16Q = 500 or Q = 5000 units

Therefore, The amount Each of them would be producing= 5,000/2 = 2500 amount Each of them would be producing=2,500 units per month

The amount each firm produces would be 2,500 units per month

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