Suppose the demand for a product is P = 150-Q and that the marginal cost of producing the product is $30. If two firms were initially competing in a Cournot oligopoly and then try to collude to maximize joint profits, what is the profit that firm 1 would actually get, given its best response function, assuming that firm 2 is producing the colluding quantity? (Hint: think about the "cheating" outcome)

Suppose the demand for a product is P = 150-Q and that the marginal cost of producing the product is $30. If two firms were initially competing in a Cournot oligopoly and then try to collude to maximize joint profits, what is the profit that firm 1 would actually get, given its best response function, assuming that firm 2 is producing the colluding quantity? (Hint: think about the "cheating" outcome)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.3P

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