Ingrid, Inc. owns a gasoline station that is located across the street from a gasoline station owned by Sydney, Inc. These are the only two gasoline stations in town so all consumers have to buy at one or the other. A local economist has estimated the demand for this market to be:
Q=80-6P
Both Ingrid, Inc. and Sydney, Inc. buy gasoline from the same supplier and can buy all they want at $2.20 per gallon. Assuming that both companies want to maximize their profit and do not violate any collusion laws, how much will each firm sell (i.e. what are Q1 and Q2), what is the market price that will be charged, and what are each firms profits?