How do you find the Cournot Equilibrium Level and Collusive Output and Price in

R

reuben

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Economics? Consider the following Duopoly

Market Demand = P = 14 – Q , where Q = (q1 + q2)

Further assume that MC = 0

a) Find the reaction curve for each firm
b) Find the Cournot Equilibrium level of Market Output (Q) and then find the Price (P)
c) Find the Collusive Output and Price.
d) Now assume the Firm 1 is a Stackelberg Leader and find q1, q2, p1, p2
 
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