What is the cournot equilibrium in a one-shot game

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Reference no: EM133334848

Assignment:

Suppose 2 firms compete in quantities in a market in which the market demand is p = 300-q. Each firm has a constant marginal cost of $60.

1. What is the Cournot equilibrium in a one-shot game?

2. What is the monopoly output and profit?

3. Suppose the 2 firms repeat the game for infinitely many times. consider the trigger strategy: the firms produce 1/2 of the monopoly output as long as no one deviates in the past. Otherwise, the firm produces the Cournot output forever. what is a firm's best deviation profit?

4. Is the collusion sustainable?

Reference no: EM133334848

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