Assume that you are the company manager for the company Bostadsbolaget and that your only competitor is the company Bohemma. The products of the two companies are seen as identical by most consumers and they also have identical costs according to TC (Q) = 4Q. Suppose its inverse market demand is estimated at P = 160 - 2Q. Currently you take

and your competitor's production decision at the same time.

a) What market form prevails in the market? Which assumptions do you justify

this with?

b) What is profit maximizing price, quantity and profit in the market and for

companies given this market form?

c) Assume that Bostadsbolaget could choose the production level before the company

Bohemma. What market form now prevails in the market? Motivate your answer and write what the effects will be for the companies and the market.