UESTION 4 e demand for the product is given by Q-120-2P Firm 1 can produce 10, 2
ID: 1153540 • Letter: U
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UESTION 4 e demand for the product is given by Q-120-2P Firm 1 can produce 10, 20, or 30 units with a per-unit cost of $10 20-2P Fim 1 cam produce 10, 20, or 30 units witha pr un 0 Two firms produce the same product Th 2 can produce 20 or 40 units with a per-unit cost of $14 The two firms select their quantilies simultaneously What quantities will they choose? (10.20) (20,20) (20,40) (30,20) (30.40) 1 points QUESTION 5 Consider again the situation in question 4 and suppose that Firm 2 will be able to produce 30 units (in addition to its previous alternatives i it invests $100 Wouldi pay for Firm 2 to invest this amount? lf Firm 2 does not ivest (whether it is in its interest to do it or not), would Finn 1 be interestedin financing this investment for Firm 2 Click Save and Submit to save and submit. Cliek Save All Annuers to save all ansuvers Close Window Save All AnswersExplanation / Answer
4) The firms will choose the quantity where their profit is maximized.
Solving the equation, we get that Firm 1 maximizes the profit when producing 30 units and Firm 2 maximizes the profit when producing 40 units.
Therefore,option (e)30,40
5) The answer is Yes,it would pay for firm 2 to invest this amount and,
Yes,firm 1 would be interested in financing this investment for firm 1.
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