Assume That Demand for a Product That Is Produced at Zero

Short Answer

Assume that demand for a product that is produced at zero marginal cost is reflected in the table below.
$$\begin{array} { | c | c | } \hline \text { Quantity } & \text { Price } \\\hline 0 & \text { R36 } \\\hline 200 & \text { R33 } \\\hline 400 & \text { R30 } \\\hline 600 & \text { R27 } \\\hline 800 & \text { R24 } \\\hline 1000 & \text { R21 } \\\hline 1200 & \text { R18 } \\\hline 1400 & \text { R15 } \\\hline 1600 & \text { R12 } \\\hline 1800 & \text { R9 } \\\hline 2000 & \text { R } 6 \\\hline 2200 & \text { R3 } \\\hline 2400 & \text { R } 0 \\\hline\end{array}$$
a. What is the profit-maximising level of production for a group of oligopolistic firms that operate as a cartel?
b. Assume that this market is characterised by a duopoly in which collusive agreements are illegal. What market price and quantity will be associated with a Nash equilibrium?