Question

consider a market structure comprising two identical firms A and B each with the cost function given by Ci=30Qi for i={A, B} is output produced by each firm....
market demand is given by P=210-1.5Q, where Q=QA+QB
1. Find Cournot equilibrium
2. What will be the outcome if the firms decide to collude?Compare it with the under the Cournot equilibrium?​

Answer 1

Explanation:

identical firms A and B each with the cost function given by Ci=30Qi for i={A, B} is output produced by each firm....

market demand is given by P=210-1.5Q, where Q=QA+QB

1. Find Cournot equilibrium

2. What will be the outcome if the firms decide to collude Compare it with the under the Cournot equilibrium....