Two companies respond to the macroeconomic conditions

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Reference no: EM1315315

Q1. There are two firms in the blastophemes industry. The demand curve for blastophemes is given by p = 4,500 - 4q. Each firm has one manufacturing plant also each firm i has a cost function C(qi) = q2i, where qi is the output of firm i. The two firms form a cartel also arranges to split total industry profits evenly. Under this cartel arrangement, they will maximize joint profits if

Q2. Explore in particular Elucidate how the two companies' respond to the macroeconomic conditions in terms of their:

Reference no: EM1315315

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