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).