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

Question 31

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 profit of each firm?


A) 618.75
B) 675.50
C) 600
D) 900

Correct Answer:

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