Compute the profit-maximizing levels of output and prices

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Reference no: EM13800466

The price in a market is dominated by two firms is affected by the quantities supplied by both firms, Q1 and Q2: P = 100 - (Q1 + Q2). The marginal cost for the two firms is identical and constant and equal to 25.

a. Derive the equations for total revenue for the two firms.

b. Compute the profit-maximizing levels of output and prices for the firms.

c. Compute the profit-maximizing level of output and price for the industry if the duopolists merged and formed a monopoly.

d. Compare and contrast the results from c. and d.

Reference no: EM13800466

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