What profit does each firm earn with such collusion

Reference no: EM13203407

Once again, assume Cournot competition in an industry in which market demand is described by:
P = 260 - 2Q and in which each firm has a marginal cost of 20. However, instead of two firms, let there now be four.
a. What is the one-period Nash equilibrium market price? What is the output and profit of each firm in this equilibrium?
b. What is the output of each firm if they collude to produce the monopoly output? What profit does each firm earn with such collusion?

Reference no: EM13203407

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