Question
Microeconomics Question on Consumer theory
In a market, two firms F1 and F2 are producing homogenous products. The inverse demand function is given by p=120-0.5(q1+q2), where p is the unit price of the product, and q1 and q2 are the outputs from F1 and F2, respectively. Suppose the cost functions of F1 and F2 are C1 = 20q1 and C2 = 10 +0.5q22, respectively. Then the total profit earned by both the firms assuming a competitive situation is (in integer).
Answer
The correct answer is: 190 to 190 OR 4790 to 4790 (approx.)