Question

Suppose that two identical firms are selling a product and that they are the only firms in the market. Total costs are Ci = 20Qi for each firm. The market demand curve is P = 80 – 0.5Q where Q = Q1 + Q2. The Cournot model describes the competition in this market. Using the above information, complete the below statements,

a.)If these two firms collude, their combined output is equal to

b.)If these two firms collude, each firm’s output is equal to

c.) If these two firms collude, the market prices is equal to

d.) If these two firms collude, their combined profit is equal to

e.) If these two firms collude, each firm’s profit is equal to

Answer 1

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