A duopolistic industry consists of two identical firms firm


A duopolistic industry consists of two identical firms (firm 1 and 2). Both firms have a constant average total cost and marginal cost of $4 per unit. Suppose the industry faces a demand curve given by P = 22 - 3Q. a) Find the firms’ quantities and profits if they collude. b) Find the firms’ quantities and profits if they engage in a Bertrand price competition. c) If the two firms engage in Cournot quantity competition, what will be the equilibrium price and quantity for the industry?

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Business Economics: A duopolistic industry consists of two identical firms firm
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