Oligopoly Example Industry demand is given by: P=200 - 4Q Assume there are 2 firms in the industry A and B. Costs are the same for both firms. The...

Oligopoly

Example

Industry demand is given by:

P=200 - 4Q

Assume there are 2 firms in the industry A and B. Costs are the same for both firms.

The cost curve for the individual firm is given by: TC=10qi+qi2

Find price, output and profit given that it is a centralized cartel.

Find prices and output for an individual firm and profit given that it is a decentralized cartel

Example

Industry demand is given by:

P=150 - 3Q

Cost curve for individual firm is given by: TC=5qi+2qi2

Assume there are 2 firms in the industry A and B. Costs are the same for both firms.

Find price, output and profit given that it is a centralized cartel.

Find prices and output for an individual firm and profit given that it is a decentralized cartel.