Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 15

Two firms compete in a market to sell a homogeneous product with inverse demand function P = 600 - 3 Q. Each firm produces at a constant marginal cost of $300 and has no fixed costs. Use this information to compare the output levels and profits in settings characterized by Cournot, Stackelberg, Bertrand, and collusive behavior.