Producer surplus in duopolistic industry

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Reference no: EM1314944

Two identical firms face linear demand. Market demand is given by P=30-Q. suppose both firms face zero marginal costs.

1. Solve for Cournot equilibrium prices and outputs.

2. Solve for Stakelberg equilibrium prices and outputs.

3. Compare graphically consumer and producer surplus in Cournot and Stakelberg equilibrium to perfect competition.

Reference no: EM1314944

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