(Answered) Suppose market demand is p 150

Management Studies

Suppose market demand is P = 150 - Q, cost of production of each firm is C(qi) = 30qi . Assume there are two firms,1 and 2, engaging in a Cournot competition. Consider a price-fixing (or collusion) agreement between them to achieve monopoly price (hence the price-fixing).

1. Draw the normal form of the game where either firm can choose to Cooperate or Defect.

2. Is collusion an equilibrium?

3. What is the equilibrium?

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Business Management, Management Studies

Category:- Business Management
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