Which two firms control the entire market for gasoline

Reference no: EM13218891

Two firms control the entire market for gasoline. They both have identical marginal costs of $1/gallon. The inverse demand for a gallon of gasoline is given by P(G)=10-1.5G. Now the firm's agree to collude, but Firm A is a bastard, and after agreeing to collude, he decides to deviate from the plan. While Firm B still offers the price as above, Firm A decides to offer a different price. If we assume prices can only be changed in $.25 increments, what will firm A's profit be.

Reference no: EM13218891

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