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Consider a cournot duopoly with the inverse demand p 130 -

Consider a Cournot duopoly with the inverse demand p = 130 - Q. Both firms have constant marginal and average cost MC = AC = 10.

a- Find the Cournot-Nash equilibrium output and profit of each firm. Calculate the con-sumer surplus and DWL.

b- Suppose those two firms collude as a monopolist, find the equilibrium output and theirjoint profit. Calculate the consumer surplus and DWL under collusion.

c- Compare your results in (a) and (b).

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