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two firms face the following demand curve:p=50-5q, where q=q1+q2. the firms cost functions are c1(q1)=20+10q1 for firm 1 and c2(q2)=10+12q2 for firm 2. a. suppose
two firms face the following demand curve:p=50-5q, where q=q1+q2. the firms cost functions are c1(q1)=20+10q1 for firm 1 and c2(q2)=10+12q2 for firm 2.
a. suppose boyh firms have entered the industry. what is the joint profit maximizing level of output?
b. what is each firms equilibrium output and profit if they behave non-cooperatively? use the cournot model.
c. how much should firm 1 be willing to pay to purchase firm 2 if collusion is illigal but a takeover is not?
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