An electricity industry contains two generating firms, one of which has marginal cost= $2.50 and the other of $1.50; the demand curve is Quantity=40-4*price. Quantities are in MWH and price are in $/Mwh. Very low production cost!
A. Find cournot Equilibrium price and quaintly.
PLEASE SHOW WORK AND Clearly state Price and Quantity
B. Answer the same question as in part a if the firms behave according to the assumptions of the bertrand model.