Consider a market with (inverse)demand p = 100 - 2Q.There are two firms in the market with constant marginal and average costs of $10.
a.Determine the Cournot equilibrium quantities and price
b.What would be the collusive (joint-profit maximizing)price and quantity?
c.Derive the deadweight loss from (i)Cournot Dupoly, (ii)Collusion,and (iii)Perfect competition in this market with the two firms.
Correct Answer:
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p = 100 - 2(30)= ...
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