Asked by Dangerously Loved on Jun 01, 2024
Verified
The demand for on-line brokerage services is: If the on-line brokerage firms collude, the collusive marginal revenue function is: The brokerage firm specific marginal cost functions are: Calculate the collusive output level and market price. If the brokerage firms behaved competitively and each firm set its own marginal cost equal to price, what would be the output level and market price?
Collusive Output Level
Refers to the production level agreed upon by firms in collusion, aiming to maximize their joint profits by acting like a monopoly.
Online Brokerage Firms
Companies that provide a platform for buying and selling securities over the Internet without providing investment advice.
Marginal Revenue
The additional income earned from selling one more unit of a good or service.
- Examine the challenges and strategies of collusive behavior in oligopolies.
Verified Answer
SL
Student Lindsey StuartJun 06, 2024
Final Answer :
This implies the collusive supply sets The collusive marginal cost function is: The collusive profit maximization level sets marginal cost equal to marginal revenue. This is: The resulting price is $63.81. If brokerage firms behave competitively, each firm sets marginal cost equal to price. Thus, This implies competitive supply is Setting supply equal to demand and solving for market price gives us the competitive solution. This is: The competitive market output level is 121.182.
Learning Objectives
- Examine the challenges and strategies of collusive behavior in oligopolies.