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The price in a market is dominated by two firms is affected by the quantities supplied by both firms,Q 1 and Q 2 : P
The price in a market is dominated by two firms is affected by the quantities supplied by both firms,Q1and Q2: P = 200 - (Q1+ Q2). The marginal cost for the two firms is identical and constant and equal to 40.
a.Derive the equations for total revenue for the two firms.
b.Compute the profit-maximizing levels of output and prices for the firms.
c.Compute the profit-maximizing level of output and price for the industry if the duopolists merged and formed a monopoly.
d.Compare and contrast the results from c. and d.
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