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Two Firms Share a Market with Demand Curve Q=90-0

Question 5

Multiple Choice

Two firms share a market with demand curve Q=90-0.5P. Each has cost function C(q) =900+q2. Suppose that each firm maximizes its profit taking the other firm's production choice as given. What is the market price?


A) 60
B) 75
C) 90
D) 45

Correct Answer:

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