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The inverse market demand for a good is given by P=34-Q. There are two firms that each sell the same homogeneous good in this market. The marginal cost of production is constant at 4.
a. If these firms compete using the assumptions of the Bertrand model, what will be the market equilibrium price and quantity? Explain
b. How will your answers change if both firms compete under the assumptions posed by the Cournot-Stackelberg models? Explain.
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Analyze the effect of both a bad weather and the rumors od a deadly disease in the consumption of rice?
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