Multiple Choice
The figure given below represents two monopolists James and Jerry.James produces Good A using the input Good B which is produced by Jerry and has no other variable costs.James is the only consumer of Good B, and the marginal cost incurred by Jerry to produce Good B is zero.DA and DB represent the demand curves for Good A and Good B respectively.MRA and MRB represent the marginal revenue received from Good A and Good B respectively.It takes one unit of A to produce a unit of B.
-Refer to Figure .Calculate the profit earned by James in the absence of cooperation between the two monopolists.
A) $24
B) $12
C) $6
D) $36
Correct Answer:
Verified
Correct Answer:
Verified
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