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Assume demand is P(Q) = 1 Q and there are two firms with the same cost function c(q) =(q^2)/2. (a) Find the competitive outcome and

Assume demand is P(Q) = 1 Q and there are two firms with the same cost function c(q) =(q^2)/2.

(a) Find the competitive outcome and total profits, i.e. when firms ignore their effect on market price.

(b) Find the Cartel outcome and total cartel profits.

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