Suppose the market demand for coffee cups, an oligopoly, is P=200-4Q. The marginal cost is 80. There are two firms on this market.

a.Find the market output if this is:

i.A non-cooperative Cournot oligopoly

ii.A non-cooperative Bertrand oligopoly

iii.A non-cooperative Stackleberg oligopoly

b.If the cost associated with establishing and enforcing a cartel are very small, would the firms described in (a), (b) and (c) attempt to cartelize and under what conditions?

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