Managerial Economics 7th Edition by Paul Keat ,Philip Young,Steve Erfle

Exercise 1

There are only two firms in the widget industry. The total demand for widgets is Q = 30 2 P. The two firms have identical cost functions, TC = 3 + 10 Q. The two firms agree to collude and act as though the industry were a monopoly. At what price and quantity will this cartel maximize its profit