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Suppose that a freak weather event wipes

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Suppose that the inverse market demand for pumpkins is given by P = $10 - 0.05Q. Pumpkins can be grown by anybody at a constant marginal cost of $1. Suppose that a freak weather event wipes out the pumpkins of all but two producers, Linus and Lucy. Both Linus and Lucy have had bumper crops and have more than enough pumpkins available to satisfy the demand at even a zero price. If they collude to generate monopoly profits, what price will they each charge?

Reference no: EM131171294

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