Suppose the demand for pizza in a small isolated town is p = 20 - 2Q. There are only two firms, A and B. Each has a cost function TC = 4 + 4Q.

Determine the equilibrium quantities of each if they form a cartel and share the market.

Determine the equilibrium quantities of each if both behave as Cournot duopolists.

Determine the equilibrium quantities of each if firm A is the Stackelberg leader.

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Expert Solution

Rahul Sunny answered 1 year ago

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