Elucidate price and output determination under any two non-collusive models of
Oligopoly.
(b) Consider a market structure comprising two identical firms (A and B), each with the cost
function given by
Ci = 30Qi
, where Qi for i = {A, B} is output produced by each firm.
Market demand is given by
P = 210 − 1.5Q, where Q = QA + QB
(i) Find Cournot equilibrium.
(ii) What will be the outcome if the firms decide to collude? Compare it with the results
under the Cournot equilibrium.
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