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6. (20) There are two firms (firm A and B) that produce identical products. Both have zero cost (C(Q) =0). They simultaneously choose quantities: QA

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6. (20) There are two firms (firm A and B) that produce identical products. Both have zero cost (C(Q) =0). They simultaneously choose quantities: QA and QB. Demand is P = 24 - QA - QB. a. (4) Derive the monopoly output. Denote this QM. b. (9) Could the firms form a cartel and successfully collude at the monopoly output? That is, show whether perfect collusion is a Nash Equilibrium (define a Nash Equilibrium). c. (9) Derive the Nash Equilibrium (Cournot) output and show that it is a Nash Equilibrium

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