Answer to Question #270127 in Economics for pau

Question

suppose that tge demand curve facing OPEC is given by P=120-2Q and that ecah members cpst of producing oil AC=MC =$20.Find the cartels profit maximizing total output and price

Answer 1

$\pi=TR-TC$

$\pi=(120-2Q)Q-20Q$

$\pi=100Q-2Q^2$

$\frac{\delta \pi}{\delta Q}=100-4Q$

$Q=25$

$p=70$

$\pi=1250$