: Two firms compete to sell a homogenous good in a market characterized by a demand function Q = 250 - 1/4P. Each firm has the same cost function at C(Q) = 200Q. Use this information to compare the output levels and profits in settings characterized by Cournot, Stackelberg, Bertrand, and Collusive behavior.

a. Cournot oligopoly

b. Stackelberg oligopoly where firm 1 leads, firm 2 follows.

c. Bertrand oligopoly

d. The firms collude rather than compete.

e. Assume you are working for a government regulator and you have found that firms in the industry are working together to set prices to maximize industry profit. Why is this type of behavior of particular interest to a government regulator and what action, if any, might you take?