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2 . The daily inverse demand curve for taxi journeys from Maynooth to Liffey Valley shopping centre is P ( Q ) = 4 0
The daily inverse demand curve for taxi journeys from Maynooth to Liffey Valley shopping centre is
PQQ where P is the price per journey, in and Q is the number of daily journeys. Assume that
only two taxi companies currently operate in this taxi market. Each taxi journey costs to provide.
Suppose that the two taxi companies collude and agree to each provide half of the daily journeys that a
monopoly taxi company would. Is this a Nash equilibrium outcome, ie is such a collusivecartel agreement
stable, and, if not, what is the Nash equilibrium outcome in terms of daily journeys?
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