Assume that two identical firms in a purely oligopolistic industry selling a homogenous product agree to share the maket equally. The total market demand function for the commodity is Qd = 240 – 10P.

Assume that two identical firms in a purely oligopolistic industry selling a homogenous product agree to share the maket equally. The total market demand function for the commodity is Qd = 240 – 10P. The cost schedules of the firms are given in the following table:

q1 40 50 60 80 q2 50 70 100SMC1 (Rs.) 8 10 12 16 SMC1 (Rs.) 4 6 9SAC1 (Rs.) 13 12.3 12 13 SAC1 (Rs.) 7 6 7