Consider a Cournot duopoly, where each firm has a marginal cost MC = 80, and the total
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Question:
Consider a Cournot duopoly, where each firm has a marginal cost MC = 80, and the total market demand is given byQ = 400 (0.5)p
a)What are the best-response functions of each firm?
b)What is the equilibrium output level for each firm?
c) How does the total output level compare to the cartel (collusive) output level?
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