Question Three

Assume that the market demand for aphrodisiac bath oils is P = 300 - 2Q

Assume that each firm has a constant marginal and average total cost of $25: hence MC = 25

1. Fill in the table below for each market structure. (You can show working below the table so the answers in the table are clear.)

	Collusive monopoly	Cournot Oligopoly	Bertrand Oligopoly	Stackelberg Oligopoly (Firm A is first mover)
Firm A's Quantity
Firm B's Quantity
Industry Quantity
Price
A's Profit
B's Profit
Industry Profit

1. Although the Bertrand oligopoly appears to have the best outcome for consumer welfare, in the real-world however, why might the Bertrand oligopoly not necessarily be the best for consumers?