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Two firms exist in a market with demand curve P=200-1.25Q and identical costs with MC=AC=25. Consider the game matrix of their payoffs when cooperating as
Two firms exist in a market with demand curve P=200-1.25Q and identical costs with MC=AC=25. Consider the game matrix of their payoffs when cooperating as a cartel (where firms split equally monopoly production) and cheating on that cartel (where firms act as Cournot competitors). How much does P2 earn in the bottom left box (that is, when P1 cheats and P2 does not)
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International Economics Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
9th Edition
978-0132146654, 0132146657, 9780273754091, 978-0273754206
