Calculate the profit-maximizing price-quantity combinations

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If a duopolist has a linear demand curve of the form Q=400 - P. TC=3000+100Q two demonstrating that:

Assuming each firm has total cost (). Calculate the profit-maximizing price-quantity combinations using the oligopoly pricing models listed below

a. Under the Cournot model, both firms will earn same level of profit and determine industry profit and explain why this is would be the case.

b. Under the Stackelberg's model the leader will earn more than twice the profit of the follower and that total industry profits will be lower than under both Cournot and Cartel models. Explain why this is would be the case.

Reference no: EM133116003

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